Discrepancy in USPS numbers

Numbers don’t add up for closure of processing center, chamber study based on estimates

By Chris Stroisch, Correspondent

The Greater Springfield Chamber of Commerce (GSCC) recently released an economic impact study to determine how the possible closure of the U.S. Postal Service’s mail processing facility in Springfield would financially impact Sangamon County. But the study’s findings are at odds with the Postal Service’s recent feasibility study.

In September, the Postal Service announced plans to close 252 of the 487 mail processing facilities in the United States, including nine in Illinois. Springfield’s Cook Street facility was on the list, along with facilities in Bloomington, Carbondale, Centralia, Chicago, Effingham, Fox Valley, Quincy and Rockford.

Following the announcement, GSCC contacted the Northern Illinois University Regional Development Institute to conduct a study to determine how the loss of the 300 employees at the Springfield facility would affect employee compensation, county output and gross county product, also known as the county GDP.

“Our belief is that there is typically a great deal of emotion around the potential of a closure of a facility of this type, as well there should be,” said Erich Bloxdorf, president and chief executive officer of the GSCC, as to why a study was needed. “We also wanted to have hard facts to back up the significant negative impact to our community should the processing center be closed.”

The NIU study, which was conducted using calculations from modeling software rather than field research, found 145 indirect jobs would be lost in the service and retail sectors if 300 postal service positions were cut. The county would also lose $29.2 million in direct and indirect employee compensation annually, $42.7 million in direct and indirect output, and see a $31.6 million annual decrease in the gross county product.

However, developers of the study were provided with an estimated number of job losses, not a confirmed number from the Postal Service.

“It is our understanding that GSCC received this number from the local American Postal Workers Union’s estimate of the number of jobs that are associated with the processing center,” said Lisa Bergeron, one of the NIU study developers.

Valerie Welsch, spokesperson for the Postal Service, disputes the number and said she does not know where NIU got their numbers from.

“The Springfield plant has 237 total employees; 10 are part-time,” said Welsch. “(These) numbers do not include any customer service employees. Customer Service will not be affected if the processing plant is closed.”

Those employees will continue to work retail, said Welsch.

“For bargaining unit employees, the Postal Service will follow collective bargaining agreements for the placement of employees,” said Welsch. “Some employees may choose to move to other positions such as letter carrier.”

Welsch later told another media outlet, following a feasibility study conducted by the Postal Service, that only 114 union employees and four management positions would be eliminated total.

Josh Collins, director of government relations for GSCC, said the original number provided to NIU for the economic impact study was an estimate because they could not get an official number.

“The 300 number is actually an estimate from the local American Postal Workers Union based upon positions they represent those that will be affected by the processing center moving to St. Louis,” said Collins in an email. “They believe around 300 jobs support the processing center operations, however, they, like us were unable to get an official number from the Postal Service. So, we used the Union’s estimate.”

A message left for Jim O’Connell, president of the local APWU chapter, was not returned in time for publication.

Based on calculations by Springfield Business Journal, the estimated losses of $23.5 million in direct employee compensation, $5.7 million in indirect employee compensation, $26.3 million in direct county output, $16.4 million in indirect county output, $21.7 million in direct gross county product, and $9.9 million in indirect gross county product would be more than cut in half if only 114 positions are eliminated.

Regardless of numbers, the Postal Service says cuts are needed.

With the release of the economic impact study, Springfield Mayor Mike Houston said the closure of the Cook Street facility would have a drastic impact on the city.

“This study confirms that the closure of Springfield’s main mail sorting facility will have a drastic financial impact on our community,” said Houston, in a statement. “The loss of jobs and taxes alone means millions of dollars will no longer be spent in our community. It will cause other businesses to suffer, and fail. And, it will further exacerbate the problems we are having as we struggle to provide essential city services with continually shrinking revenue.

“I find it hard to believe that the capital of Illinois might soon not have its own postmark,” said Houston.

According to the Postal Service, however, closing processing facilities will help the organization address financial challenges associated with the continued decline of First-Class Mail volume and loss revenue.

“The U.S. Postal Service must reduce its operating costs by $20 billion by 2015 in order to return to profitability,” said David Williams, vice president, Network Operations, in a statement. “The proposed changes to service standards will allow for significant consolidation of the postal network in terms of facilities, processing equipment, vehicles and employee workforce and will generate projected net annual savings of approximately $2.1 billion.”

Closing and consolidating many of the processing facilities will also allow the Postal Service to better optimize transportation and provide an increased processing window, according to Welsch.

“The decline in First-Class Mail volume of about 27 percent means the USPS (has) too many plants, too much equipment and too many employees than is needed to process the current mail volumes.”

For now, employees at post offices and mail processing facilities nationwide, including employees at the Cook Street facility, have a short reprieve as the Postal Service announced on Dec. 13 that it would halt closing additional facilities until May 15, 2012, so Congress can develop a plan to save the service.