03/28/2012 06:02 pm ET Updated May 28, 2012

New Orleans Tries to Hold on to Its Mail Plant During USPS Cuts

Plans to move regional, mail-processing activities from Loyola Avenue in downtown New Orleans to Baton Rouge are not a done deal, according to the U.S. Postal Service and union spokesmen last week. In December, Congress imposed a moratorium on any closings of postal plants and offices across the nation until May 15, and the Senate is expected to consider postal legislation shortly.

Charlie Vigee, president of the National Association of Letter Carriers' union branch 124 in New Orleans, said last week that the city and the unions appear to have some time to fight for the local plant. For one thing, USPS won't consolidate any facilities this fall because of election mail, he said.

Messages from USPS have been mixed. In its study dated Feb. 16, Loyola Ave. processing would be shut, and a leased St. Rose, La. facility will be used as a hub for New Orleans mail before it's processed in Baton Rouge. Consolidating operations in Baton Rouge would save millions of dollars annually on equipment, personnel and space, according to USPS planners. Last week, McKinney Boyd, Dallas-based USPS spokesman, said the proposed move would cut redundancies in transportation, operations, facilities and utilities.

On Feb. 23, USPS said that it had approved consolidation of 223 mail processing plants nationwide, including Loyola Ave. and Baton Rouge. But last week Boyd said "at this time, no decision has been made about the New Orleans plant -- if and when the moratorium is lifted," referring to the one Congress imposed until mid-May.

USPS said on March 7 said that it would suspend plans to consolidate processing across the country this fall to avoid any effects on the November elections. "Therefore, most closures or consolidations would have to take place starting after May 15 and be completed by August 31," USPS said. "Further consolidation of facilities would then continue in early 2013." In other words, closings will cease from September to December. In addition to its election concerns, USPS probably doesn't want to interfere with holiday mailings either because its revenue comes from fees -- like postage on gifts at year-end, sometimes at premium Express Mail rates.

If the Loyola Ave. plant is shut, you can forget about regular, next-day mail within New Orleans. A birthday card sent to a neighbor will trek 80 miles to Baton Rouge first. As for the 880 workers doing processing at Loyola Ave., they will have to be transferred, riffed under a Reduction In Force process, given early retirement or will seek jobs elsewhere. Hundreds of positions will be lost for good in New Orleans, according to the USPS, while a projected 295 positions will be added in Baton Rouge. USPS's Boyd said 400 people work in the Baton Rouge processing facility now.

Why exactly does USPS want to close the New Orleans plant? In a Dec. 15 letter to the White House, New Orleans Mayor Mitch Landrieu attributes it to rancor between the Loyola Ave. facility and USPS's regional leadership in Dallas after Hurricane Katrina.

The mayor said in a Dec. 15 letter to the White House that Southwest-area USPS leadership in Dallas has an ax to grind and wants to shut the New Orleans facility despite evidence that Loyola Ave. is a cost-effective, long-term hub for southern Louisiana. After Katrina, New Orleans leadership fought plans by Southwest-area USPS to cut postal routes in sections hard hit by the storm, like the Lower Ninth Ward. Nearly all the New Orleans USPS management has been fired or has transferred or quit since Katrina, according to the mayor's letter. The Dallas leadership wants to settle scores by closing the New Orleans facility, he said.

Dallas has conducted three, full Area Mail Processing studies in New Orleans and has tweaked numbers to try to show that consolidation would work, Mayor Landrieu said in his December letter. The studies were shrouded in secrecy, easily manipulated and flawed, he said. The AMP studies didn't consider the city's recent population growth, the cost of moving the center and of future mail deliveries, or the role of the New Orleans airport.

When asked last week if USPS might use airports in both Baton Rouge and New Orleans under its consolidation plan, McKinney Boyd said "no decision has been made about which airport the Postal Service will use to ship mail volume." And in the Feb. 16, USPS study for the New Orleans and Baton Rouge facilities, the discussion of airports is vague.

Ryan Berni, press secretary to Mayor Landrieu, said last week that the mayor's office will continue to make its case to USPS and federal officials. "We've had at least a half dozen meetings with USPS officials, including the mayor meeting personally with the U.S. Postmaster General," he said. "We put together a group of stakeholders, and the goal of that group was to get good data and research on which to base our arguments about keeping the Loyola Ave. center open. This group wrote letters, filed public records requests and held meetings."

As for chances for USPS workers to transfer, Vigee said New Orleans has about 50 openings for letter carriers now. "USPS has been encouraging clerks on Loyola Ave. to apply for these openings, and has tried to sell the advantage that they wouldn't have to work on Sundays," he said. Many of the open positions for letter carriers are now filled by temporary workers, who don't receive health insurance in the first year.

A number of municipalities across the country have questioned the quality of the USPS's consolidation research. In a Feb. 23 statement, Mayor Landrieu said USPS studies fail to consider that the New Orleans Louis Armstrong International Airport accommodates the needs of USPS far better than any other airport in the state, ensuring timely delivery. And shutting the Loyola Ave. facility will severely damage service to downtown customers, he said. The Loyola Ave. operation was just renovated, has more capacity than other sites in Louisiana, and is on a city corridor ripe with new public and private investment.

Congress got USPS into its current plight when it passed a law in 2006 requiring that health benefits for future retirees be pre-funded for 75 years, said Sally Davidow, spokeswoman for the American Postal Workers' Union in Washington, DC. That requirement has cost USPS $5.5 billion a year. Today's mess shouldn't be blamed on email and people sending fewer letters because without the need to pre-fund benefits, USPS would have had a modest surplus in the four years after pre-payments started, she said.

Davidow also said "many of the USPS's plans for consolidation are hard to discern. It's often unclear why they selected one facility or location over another."

Twenty-seven U.S. senators, including Louisiana's Mary Landrieu, signed a Feb. 14 letter to Senate sponsors of the 21st Century Postal Service Act or S. 1789, saying "the Postal Service should not be required to pre-fund 75 years worth of future retiree health benefits." The senators recommended that USPS adopt a new business model and that it be allowed to engage in some activities it's prohibited from now -- like photocopying, notarizing and issuing licenses for hunting and fishing.

Regional mail processing has been located in downtown New Orleans for the past 50 years, and local law firms and companies are engaged in the fight to protect next-day mail service. "If processing moves to Baton Rouge, you'll probably have to pay about $13 in New Orleans to send a letter to someone in the city for next-day arrival," Vigee of NALC said.

The Loyola Ave. facility processes 3.6 million packages and letters a day for delivery to over 210,000 locations.

(This article was published in "The Louisiana Weekly" in the March 26, 2012 edition.)