The newly appointed regional postal manager has two goals: to serve customers better and improve working conditions at the U.S. Postal Service's troubled processing plant in Southwest Philadelphia.

Yesterday, Jim Gallagher, the new regional postal manager, told union leaders that he had an "open-door policy" and wanted to work with the unions to carry out the two goals.

"I see this as a very positive first step," said Gwen Ivey, president of American Postal Workers Union Local 89.

Calling the one-hour meeting "very productive," Ivey said that she and other union officials had met with Gallagher and Janet Smith, director of labor relations for the Philadelphia postal service.

Ivey said that Gallagher, a former Philadelphia postmaster, had not elaborated about the problems because "a full-blown investigation was under way."

Gallagher replaced Frank Neri after a series of Daily News stories exposed mismanagement at the Southwest Philly site.

On Oct. 24, the union filed a complaint with the Postal Service's Office of Inspector General about delayed, missing and destroyed mail at the processing plant on Lindbergh Boulevard near Island Avenue.

Among the issues cited in the complaint were that senior postal managers allegedly ordered clerks to do the following:

* Undercount the mail by millions of pieces each week;

* Change the color codes of mail bins so that mail would not be considered late;

* Reroute tractor-trailers filled with unsorted mail to avoid counting the mail;

* Send allegedly fraudulent daily mail-count reports to headquarters in Washington.

During the weekend, inspector-general investigators began observing the mail flow and talking with postal workers, Ivey said.

APWU represents 2,200 members at the processing plant, the Air Mail Center and 20 neighborhood post offices in the 190- and 191- ZIP codes.

Gallagher also plans to meet with the unions representing the letter carriers and mail handlers.

Meantime, customers such as the Millay Club, in South Philadelphia, continue to complain about mail deliveries .

Walter Belovitz, executive director, said that the Millay Club conducts quarterly fundraisers for the alumni of Bishop Neumann- Saint John Neumann High School.

Of the club's $1.5 million budget, nearly $900,000 is spent on 16,000-piece mailings, which include business-reply envelopes, said Belovitz.

Normally, the club receives between 1,300 and 1,700 responses. But ever since mail processing moved from 30th Street station, "it's been worse," he said.

Not only isn't he getting the reply envelopes back, but the ones he gets back are delayed for months or torn when they arrive, he said. A Sept. 13 check arrived on Nov. 25. A check mailed on Sept. 30 for an Oct. 11 event arrived weeks late and was torn inside a plastic bag, said Belovitz.

When Belovitz checked at a local post-office branch about the club's reply envelopes, he added, he was told there was no one to process them.

If there's only one or two envelopes, he said he was told, they wait until there's 10 or 12.

Postal workers say that the business-reply envelopes sit in bins until they are full before they are processed, or sometimes they are tossed in waste bins to be destroyed. *