Postage Hike on Way, Chief Says : Mail: U.S. postmaster general predicts continued rate increases. He addressed 2,500 at a forum in Anaheim.

Anthony M. Frank would like to be remembered as the man who automated U.S. Postal Service operations, but the postmaster general may be remembered as the man who ushered in big rate increases.

Nonetheless, the colorful and outspoken Frank said in an interview Monday that the proposed increase in first-class postal rates from 25 cents to 30 cents--which prompted initial public outrage--will probably go into effect next February.

And it won’t be the last. Frank said another increase in stamp prices will probably be needed to keep the Postal Service on a break-even budget through the rest of the decade. The next increase probably would not come until 1995 or 1996, he said.

Next year’s rate increase is needed to bail the agency out of a $1.6-billion deficit in its current fiscal year and give it an operating surplus in fiscal 1991. The increase will cost average Americans about $11 a year, Frank said.

“To not expect a rate increase is to live in never-never land,” he said, in a speech to 2,500 mailing industry professionals at the National Postal Forum in Anaheim. “The concern everyone has is how much, how often. This time we will have a 19% increase while inflation goes up 13% over the next three years.”

So far, Frank reported that the Postal Service operated $410 million under budget for the first eight months of the 1990 fiscal year which ends Sept. 30. He said the postage rate increase is necessary because of heavy losses in 1988.

Frank said the Postal Service will be able to ease the burden of higher delivery costs on businesses dependent on the mail system by improving service and sticking to its schedule to completely automate the mail-sorting operations by 1995.

“This may sound like a broken record, but we’re committed to better service and automation by 1995,” he said.

The service will save $500 million in productivity increases during fiscal 1990, Frank said, partly as a result of the first phase of automation.

In May, 1989, the agency installed machines to read zip codes and sort mail. The productivity gain from the machines and other cost-cutting measures will enable the agency to finish this year with 20,000 fewer full-time employees, Frank said.

Among the service improvements, Frank pointed to the use of automated teller machines to distribute stamps as well as the use of facsimile machines in some locations. Such service frees postal clerks to help with complex transactions.

The Postal Service also will implement a Customer Satisfaction Index that will measure the quality of service based on customer surveys.

Frank said the agency’s new Marketing and Customer Services Group will work with customers to help them convert their equipment so it is compatible with the Postal Service’s new machines.

And despite the expected budget shortfall, Frank said the agency has no plans to drop Saturday delivery.

Eventually, after the overall rate increase takes effect in 1991, Frank said the agency could file for reduced rates for businesses that use metering equipment that is compatible with the agency’s new bar code reading equipment.

“We’ve got a long way to go to excellence, and we’ve had many problems getting automated,” he said. “But we’re coming within striking distance.”

Finally, Frank said he seeks to bring stability to the office of the postmaster general, which was racked by scandals and turnover when he came on board in early 1988. He said published reports that he might resign at the end of the year are inaccurate.

“I’ve been called the postmaster du jour, but I want to see this through,” he said.