USPS ruling on Kingman's downtown post office questioned

Agency that's losing $2B a year ending contract with profitable local post office

KINGMAN - Craig Graves understands that the U.S. Postal Service lost $2 billion in the third quarter and has recorded a loss in 21 of the last 23 quarters. That's not his doing.

What he can't understand is why the USPS wants to yank his contract on downtown Kingman's post office that's making a hefty profit and has been a community mainstay since 1935. The post office will close Dec. 31.

In a prepared statement, Kingman Postmaster Duane Whiley said USPS is "committed to identifying a more affordable downtown location." He was not allowed to speak on the record with the Daily Miner.

How can any location be more affordable than the current contract postal station at 229 E. Andy Devine Ave.?

Graves owns the 1,400-square-foot building, so there's no rent. He receives a monthly check from USPS and from that he pays himself and three employees, utilities, insurance, taxes and other operating costs.

Turning a profit

"It's been a profitable operation ever since it went into effect 30-some years ago," he said. "All I can tell you is the downtown post office has made money every year. Why is the post office doing away with boxes? They get rent from each one of those."

USPS spokesman Peter Hass in Phoenix said he couldn't answer questions about the cost of operating the downtown post office.

"I wish I could respond to that, but I can't talk about financials," Hass said. "Financials are proprietary information."

Hass had never heard of Helen Graves, the woman who ran the downtown post office on a contract basis for 38 years and who died in May, and he didn't know how many post office boxes were located there.

Craig Graves said there are more than 800 boxes downtown and that 600 of them were rented at the time of his mother's death. The smallest boxes rent for $62 a year.

Hass said the postal unit's contract came due and was extended for six months on an emergency basis. The decision to terminate the contract is made by the Arizona district retail manager for USPS in Phoenix, he said.

USPS intends to contract with another downtown business for retail postal service, such as stamps and packaging only. If someone has an interest in providing post office boxes as well, USPS will entertain those offers, Hass said.

"We want to continue to provide service at a more reasonable location in a cost-efficient manner," the USPS spokesman said Friday.

The successful bidder will become the sole Contract Access Retail System (CARS) in downtown Kingman. Compensation from USPS is performance-based, with increases based on a percentage of actual sales.

"As a U.S. Postal Service partner, you can put the power of one of the most trusted American brands to work for you," Postmaster Whiley wrote in a letter soliciting downtown businesses.

At this point, no business has expressed interest in providing such service.

'Bureaucratic buffoon'

Kingman resident Scott Dunton, who's been a customer of the downtown post office for most of his life, wondered what would happen after the passing of Helen Graves. He knew they would have a hard time finding someone to work as hard as the postmistress and as cheaply.

The USPS is "just another bureaucratic buffoon," Dunton said.

"Helen's little post office pays $100,000 a year in excess revenue to the (Postal Service)," he told the Daily Miner via e-mail. "So the post office pays $110,000 to someone to pay all the salaries and rent, utilities and expenses, and gets back $220,000 and wants to get rid of it. It probably doesn't fit into their losing billions strategy."

Dunton said it would be a shame to close the post office, taking Kingman another step backward for the revival of downtown and Route 66. Hundreds of people will no longer go downtown to get their mail, shop and eat.

Some of those people have had the same P.O. box for 70 years and aren't able to drive to the main post office on Johnson Avenue. They'll need to notify Social Security, Medicare and banks about their change of address.

The downtown post office is also used by Mohave County, the city of Kingman and businesses that will have to change their mailing addresses on stationary, business cards and other forms.

Council intervenes

Kingman City Manager John Dougherty, Mayor Janet Watson and two county supervisors have written letters requesting USPS reconsider its decision to close the post office.

Mohave County's Board of Supervisors will discuss a resolution at today's regular meeting opposing the decision and authorizing Chairwoman Hildy Angius to write a letter to USPS voicing such opposition.

"People in Phoenix and above have no idea of the function of what the downtown post office does," Graves said.

This exact issue came up in 1976 when former Mayor Joe Torres and prominent Arizona politicians fought the closing of Kingman's downtown post office. USPS officials in Phoenix said Kingman would not financially support a post office.

Jack Kesler, who lives in Riata Valley and inherited the downtown post office box from his parents, said he doesn't mind driving Clack Canyon Road to collect his mail because the service is friendly and he can avoid Stockton Hill Road.

"I am very much aware of the USPS plight with their budget," he said. "However, the issues being raised should be addressed and cleared up unless they are tempests in a teapot. Instead of looking for a retail outlet, the current situation should be considered with all the facts present."

Kesler was told the old post office boxes, built in the 1930s and moved from one location to another over the years, could not stand another move. If the plan is to actually maintain post office boxes, then the cost of building more than 500 boxes must be considered as well, he said.

"I don't know why they're losing billions," Graves said. "Is it because of the unions, salaries, retirement pensions? If they were run like the one we have, where sales far exceed your contract, I don't know why you'd be in a hole. Then again, I'm not offering benefits. I don't have big overhead issues."

USPS spokesman Hass said the service had to prepay $5.5 billion to the government to cover employee health benefits and retirement for the next 75 years, basically for people who aren't yet working for USPS.