The recent announcements by Harrisburg, Pa., and Jefferson County, Ala., of their intention to file for Chapter 9 are yet more evidence that governments, whether municipal, state or federal, have to take a long overdue look at restructuring their fixed costs.

It's been said that everything you can do in bankruptcy court can be better achieved in a restructure situation, before having to resort to a Chapter 9. Being proactive about restructuring finances before getting to the point of no return is by far preferable to doing it in court, for the simple reason that the parties can maintain a level of control as they come to a meeting of minds rather than have their decisions made for them by a presiding judge.

Many municipalities are beginning to address their financial problems in this proactive way, and some are taking very creative approaches. In Glen County, Calif., two small towns are sharing a consolidated police department; in Prichard, Ala., Mayor Ron Davis is working on a plan that would move current city employees out of the failed and moribund pension program, effectively eliminating it. And Roanoke, Va., has cut way back on mowing of public property and has eliminated leaf blowing altogether. Increasingly, these kinds of measures will have to be taken not just at a local and state level, but also at a federal level.

There's been talk of the United States Postal Service undertaking a restructure. In approaching an entity such as this time-honored institution, it's critical to maintain enough of its historical identity in whatever reductions are made that you still have a viable and recognizable entity emerging at the end of the process. It's not as obvious as closing branch post offices and renegotiating labor contracts, which characterizes the traditional approach to corporate streamlining.

Interestingly, the greatest opportunity for cost savings within the USPS comes down to geography. The USPS is a service business that has broad and deep penetration throughout the country. The range of its geographic service is so expansive that a small adjustment to its service area can make it much more cost-effective to deliver the mail.

Regional players can be extremely helpful in determining these changes, as they know the specifics of their corner of the world better than anyone else. Consider the municipal measures mentioned above. If, say, two small neighboring towns teamed up and combined their mail service, not only would cost savings be effected, but their efforts could amount to community building between the towns.

All other restructuring and cost-cutting measures should stem from an overall geographic assessment. The USPS isn't going to change its service. It will always be a delivery service for mail and small packages. But once geographic parameters are set -- and that is a complicated process in our big country -- ancillary businesses can be considered. For example, the delivery of freight mail: Does the government want to give the Postal Service a chance to compete with private companies in this area? Would it be possible to piggyback on the existing infrastructure? What are the potential returns?

Again, after a geographic assessment, other cost-cutting measures can be determined with greater ease and accuracy, as well. A review of USPS real estate could be conducted. Does every town need a post office? As a way to get to the best possible outcome, regional players and federal overseers could consider these questions.

The natural progression from these measures would be determination of the cost of personnel. The central postal labor force could be placed in less expensive areas, say Kansas City, Mo., or St. Louis rather than Washington or New York. The cost of maintaining personnel would amount to a huge savings for the Postal Service, and possibly also improve efficiency.

Finally, the cost of services could be assessed. Aside from the price of a postage stamp, are other delivery services priced reasonably and competitively in relation to other delivery options, and to the economy itself?

Whatever steps the USPS takes, we need to have a mail service that is both reliable and financially sustainable. Looking at geography is the most obvious and far-reaching place to start in making that happen. The greatest opportunity lies in getting out the map.

Deryck Palmer is a partner and co-chairman of the financial restructuring department at Cadwalader, Wickersham & Taft LLP.