Oct. 13 (Bloomberg) -- The post office in Breaks, Virginia, sits on an Appalachian country road near a white-steepled church, off a highway pounded by coal and logging trucks.
Inside are 208 boxes, one for about every two residents. Because there’s no mail delivery, Breaks townspeople have to go to the post office to pick it up.
They also go there to conduct financial transactions. The nearest banks are about 30 minutes away by car across a mountain. A bulletin board out front advertises yard sales, seeks help locating a missing person, and informs residents that the post office may be about to close.
If a retail location or plant is losing money, a company can close it. That’s not so simple for the U.S. Postal Service, even as it says it will run out of money to deliver mail by August without dramatic changes. Obstacles include the U.S. Constitution’s clause empowering Congress to establish post offices.
More than 80 percent of its locations, including Breaks, lose money, the Postal Service says. Residents of the poorest part of Virginia say they’re sympathetic to the service’s plight. To them, though, their post office is a central gathering place, economic hub and part of their identity, not something that can be measured by profits and losses.
“This would devastate the community,” James Childress, the Breaks resident leading a petition drive to stop the closing, said. “The post office is the heart and soul of the community.”
Not Like Businesses
More than 400 miles away in Washington, Postal Service Vice President Dean Granholm holds a computer mouse he can click to decide whether post offices live or die.
The Breaks office, which the service already decided to close, is one of about 4,800, or 15 percent of post offices, that the service may close in its fight for survival. The service lost about $10 billion in the year ended Sept. 30.
“Retailers close without the perceived discomfort of congressional review, Postal Regulatory Commission overview, internal angst,” Granholm, vice president of delivery and post-office operations, said in an interview at the service’s Washington headquarters.
Business customers applaud the service’s efforts to cutting costs through shuttering small post offices, which they don’t use. Direct mail would still get to postal customers through rural delivery.
“Mailers are the ones who pay rates that have to be sufficient to cover all the costs of operating the postal system,” said Gene Del Polito, president of the Association for Postal Commerce, an Alexandria, Virginia-based group that represents postal customers such as JPMorgan Chase & Co. and Capital One Financial Corp. “If we have to pay for it and rates are going up, one would expect that we can have services provided nationwide in the most cost-efficient manner.”
Internet No Competition
The Postal Service has blamed its losses on a 22 percent drop in mail volume since 2006 as individuals and businesses have switched to e-mail and electronic billing.
In Breaks, located along Virginia’s border with Kentucky, “there’s not that many people that pay their bills by Internet,” Wayne Cline Jr., 53, a retired coal truck driver, said. There is no broadband Internet access. Few families can afford to pay $50 a month or so for dial-up Internet, said Keith Mullins, 66, a retired coal miner whom Childress recruited to help save the post office.
The office serves residents of Buchanan and Dickenson Counties, the two poorest in Virginia with 2009 median household incomes of $27,538 and $28,296, respectively, according to the U.S. Census Bureau. That leaves 27 percent of Buchanan County residents and 21 percent of those in Dickenson County living below the U.S. poverty line, higher than the 11 percent average of Virginia, according to the Census Bureau.
‘Ain’t No Way’
The Postal Service says it can save $31,516 annually by closing the post office and going to rural delivery, which it says would cost $12,763 a year.
Mullins scoffs at the service’s estimate of the cost of rural delivery in an area with roads that wind through mountain hollows. “There ain’t no way they could run a route for that,” Mullins said. “You can’t even buy a pop and a Moon Pie a day for that.”
He and other residents also say they’re worried rural delivery would exacerbate prescription-drug abuse by making it easy for addicts to steal painkiller deliveries from unlocked mail boxes.
Childress, 83, a retired superintendent of Breaks Interstate Park, a 4,600-acre preserve straddling the Virginia and Kentucky Appalachians that calls itself the “Grand Canyon of the South,” said in an interview that residents realize “there’s got to be changes.” They just don’t want this change.
With help from Mullins and Cline, Childress organized a petition signed by almost every Breaks resident and filed a complaint at the Washington-based Postal Regulatory Commission, which reviews closings that are challenged.
Childress also contacted U.S. Representative Morgan Griffith, a freshman Republican whose congressional district includes Breaks.
Griffith in 2010 defeated 14-term Democratic Representative Rick Boucher with support from the Tea Party, a political movement whose goals include reducing federal spending and budget deficits. One of Griffith’s first votes in Congress was against raising the U.S. debt limit.
Cut Somewhere Else
Still, Griffith says, the Postal Service should look elsewhere for savings. A list of about 3,650 locations to close, announced by the service in July, included 20 in Griffith’s district, which spans from Virginia Polytechnic Institute and State University in Blacksburg to the borders with West Virginia, Kentucky, Tennessee and North Carolina.
“I understand the post office like all government agencies has to take a look at their spending,” Griffith said in a telephone interview as he rode to a rally to support balancing the U.S. budget. “But there are other ways to cut their costs.”
Griffith wrote a letter July 29 to Postmaster General Patrick Donahoe asking him to spare the Breaks post office.
Anyone affected by a proposed post-office closing can ask the Postal Regulatory Commission to review a decision in the 30 days after the Postal Service issues a “final determination.”
Commission reviews, which the panel is trying to simplify, can take up to 120 days. It can affirm the decision or send it back to the service for another look. If it affirms, which it did in all 14 cases decided in fiscal year 2011, the Postal Service can close the office immediately.
Breaks’ office is one of about 90 whose proposed closings are being appealed. The number grows daily as the Postal Service tries to accelerate the reduction of its network.
“There’s an administrative process that they have to follow, and it’s our hope that in following that administrative process, they will get information and hear concerns of citizens that will perhaps make them decide not to close the post office,” Commission Chairman Ruth Goldway said in a telephone interview.
Mullins wrote to Goldway’s commission Sept. 13, saying residents can relate to the Postal Service’s hardships.
“They know the effects you are facing on the financial problem you are having,” Mullins wrote in the hand-written letter. “They don’t have to worry about gas going any higher. They can’t afford a car. It’s not only senior citizens having a hard time, we all are.”
Most offices on the closings list have less than $27,500 in annual revenue and less than two hours of workload a day. The Breaks office fits those criteria, though on a recent Monday afternoon, a steady trickle of about a dozen people came in after lunch to get their mail, buy money orders, ship packages and chat about what’s going on in town.
The Postal Service understands the emotions of people who may lose their only local connection to the U.S. government, Granholm said. His job, he said, is to look out for the service’s bottom line.
“It’s not our responsibility to be their community center,” he said.
The National League of Postmasters, whose members include rural postmasters, helps communities fight closings by guiding them through the appeal process, helping get congressional involvement and providing a how-to manual, Mark Strong, the group’s president, said in an interview.
There are so many proposed closings now that the league can’t help in all situations, he said. The Breaks citizens have been on their own, they said.
‘True Rush Job’
“There’s a true rush job to get them closed by December so that we’re not sure communities are getting the chance for input,” Strong said.
The Postal Service does take offices off the computer-generated closings list. By September, it pared July’s list of 3,650 proposed closings by about 120. The service has closed about 280 post offices this year and about 300 more are in the final determination stage, Granholm said.
About 7 percent of proposed closings are appealed, Granholm said. Sometimes the service changes its mind during a regulatory commission review. Of the 103 proposed closings appealed during the 2011 fiscal year, the Postal Service withdrew two. Both had drawn civic challenges. Eighty-three appeals are pending.
Breaks residents said in interviews they’d be willing to pay for their post-office boxes like they did in the 1980s, even though money is tight. They also propose creating a “Grand Canyon of the South” postmark in hopes of drumming up mail business from tourists.
“Sometimes it seems like a useless battle, but you can’t give up,” Mullins said. “We ain’t started carrying no picket signs or throwing rocks yet. Maybe in the future.”
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