Senator Urges Postmaster General to Honor Senate Bill’s Provision Hold off on Montana Shutdowns

(Washington, D.C.) – Montana’s senior U.S. Senator Max Baucus blasts the Postmaster General today for plans to shut down the Kalispell area mail processing facility. Baucus is specifically calling out the United States Postal Service for ignoring his provisions in Postal Reform legislation that cleared the Senate and is now awaiting action in the House. The U.S. Postal Service just its newest plan for consolidating mail processing facilities across the nation. Kalispell is on the chopping block for shutdown this summer. Prior to today’s information released to Baucus’ office, the Kalispell facility was under study for potential closure, but the decision was not final.

Baucus successfully pressed the Postal Service to back away from plans to consolidate or shut down area mail processing facilities in Missoula, Butte, Helena and Wolf Point and is vowing to continue pressure on the Postmaster General to back away from plans to shut down Kalispell’s facility.

“We stopped them from shutting down Missoula, Butte, Helena and Wolf Point mail processing facilities – and I’ll fight tooth and nail to protect Kalispell and the 20 jobs that are on the line. I brought the Postmaster General to Montana and showed him firsthand that shutting down Montana facilities is a small-minded way to address a large scale problem. I’m fighting the Postmaster’s plan to close Kalispell’s processing facility and urge the House to pass our Senate postal reform bill, because it would solve the Postal Service’s problems without unfairly targeting rural Montana,” said Baucus.

Baucus included a provision in the Senate’s Postal Reform Bill that would ensure that no postal facility could be closed prior to November 13th in a state that conducts all elections by mail or permits no-excuse absentee voting (Montana qualifies). If the House passes the Senate bill, the Postal Service couldn’t even consider closing the Kalispell facility until after November 13th. Additionally, if the House fails to pass the Senate’s Postal Reform Bill, mail processing facilities in Butte, Helena and Wolf Point are all likely to be right back on the chopping block as early as next year

The plans released to Baucus’ office include 48 consolidations this summer and an additional 140 closings between December 2012 to February 2013. Unless circumstances change for USPS in the interim, they would then enter a second and final round of closings that would encompass the remaining group of 89 centers which they wanted to originally close, beginning February 2014.

May 17 2012

WASHINGTON – Today, Sen. Tom Carper (D-Del.), chairman of the subcommittee that oversees the U.S. Postal Service and co-author of the 21st Century Postal Service Act, released the following statement reacting to the Postmaster General’s announcement that the Postal Service would begin closing select mail processing centers in an effort to save approximately $1.2 billion annually:

“Today’s announcement comes a week after the Postal Service announced that it lost a staggering $3.2 billion in the second quarter of Fiscal Year 2012. In fact, the Postal Service is hemorrhaging money at a rate of at least $25 million a day and is on track to lose far more over the course of this fiscal year. Given these dire circumstances it shouldn’t come as a surprise that the Postmaster General is moving forward to reduce costs with the limited tools at his disposal, but the reality is that efforts of this scale are not enough to fundamentally fix the Postal Service’s financial problems.

“For example, today’s proposal does not address the Postal Service’s two upcoming payments of $5.5 billion for its future retiree healthcare fund, its past overpayments of $11 billion into the Federal Employee Retirement System, or the need to significantly downsize the postal workforce. Only comprehensive, long-term reform of the Postal Service can address these and other serious issues facing this American institution, and that reform can only come from Congress. The Senate has recognized that need and last month passed a comprehensive, bipartisan bill that would modernize the Postal Service, allowing it to right-size and become competitive in the 21st Century. Now it’s up to the House to pass a bill. In the three weeks since the Senate acted, the Postal Service has lost over $500,000,000 – already wiping out nearly half of the savings today’s plan would achieve annually. Clearly, the Postal Service can’t afford to wait any longer for Congress to pass a comprehensive plan. I hope that my colleagues in the House will recognize the urgency of this situation and announce when they intend to act to save the Postal Service.”

Postal Service Moves Ahead with Modified Network Consolidation Plan
9-Month Implementation; $1.2 Billion in Cost Reductions

May 17, 2012

WASHINGTON — The U.S. Postal Service today announced plans to move ahead with a modified plan to consolidate its network of 461 mail processing locations in phases. The first phase of activities will result in up to 140 consolidations through February of 2013. Unless the circumstances of the Postal Service change in the interim, a second and final phase of 89 consolidations is currently scheduled to begin in February of 2014.

“We revised our network consolidation timeline to provide a longer planning schedule for our customers, employees and other stakeholders, and to enable a more methodical and measured implementation,” said Patrick R. Donahoe, Postmaster General and Chief Executive Officer of the Postal Service.

“We simply do not have the mail volumes to justify the size and capacity of our current mail processing network. To return to long-term profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload,” said Donahoe. “Our current plan meets our cost reduction goals, ensures seamless and excellent service performance throughout the implementation period, and provides adequate time for our customers to adapt to our network changes.”

The Postal Service will begin consolidating operations this summer – which mostly involve transferring mail-processing operations from smaller to larger facilities. Due to the volume of high-priority mail predicted for the election and holiday mailing seasons, no consolidating activities will be conducted from September through December of 2012. Approximately 5,000 employees will begin receiving notifications next week related to consolidating and other efficiency-enhancing activities to be conducted this summer.

“We will be conducting consolidation activities this summer at only 48 locations,” said Megan Brennan, chief operating officer of the Postal Service. “As a result, nearly all consolidating activities in 2012 will occur in August and then will resume again the early part of next year.”

These consolidating activities will reduce the size of the Postal Service workforce by approximately 13,000 employees and, when fully implemented, will generate cost reductions of approximately $1.2 billion annually.

“The Postal Service will be communicating with our customers and employees about these changes in great detail,” said Megan Brennan. “We will work closely with our customers to ensure there are no surprises as we move forward.”

The Postal Service also announced it is working with its unions for an employee retirement incentive, although no final decision has been made. “The Postal Service has reduced the size of its workforce by 244,000 career employees since 2000 without resorting to layoffs,” said Brennan. “We are a responsible employer and we will work with our employees to ensure a smooth transition to a much leaner organization.”

The Postal Service also announced that it would soon issue a new regulation to modify its existing Service Standard for overnight delivery. The Postal Service said a Final Rule would soon be published in the Federal Register that would initially shrink the geographic reach of overnight service to local areas and enable consolidation activity in 2013. The new rule would further tighten the overnight delivery standard in 2014 and enable further consolidation of the Postal Service mail processing network absent any change to the circumstances of the Postal Service.

“We are essentially preserving overnight delivery for First-Class Mail through the end of 2013, although we are collapsing the distance that we can provide overnight service to the distribution area served by a particular mail processing facility,” said Megan Brennan. Approximately 80 percent of First-Class Mail will still be delivered overnight.

The Postal Service stated its expectation to pursue additional consolidation activities for an additional 89 mail processing locations beginning in 2014 unless its circumstances change. These consolidations would be based on long-term service standards that would significantly revise mail-entry times for customers seeking overnight delivery.

“Given that the Postal Service is currently projecting a $14 billion net loss in FY2012, and continuing annual losses of this magnitude, we simply cannot justify maintaining our current mail processing footprint,” said Donahoe.

When fully implemented in late 2014, the Postal Service expects its network consolidations to generate approximately $2.1 billion in annual cost reductions, and lead to total workforce reduction up to 28,000 employees.

The list of 140 mail processing locations to be consolidated by February of 2013 is available after 3 p.m. ET today at http://about.usps.com/news/electronic-press-kits/our-future-network/welcome.htm.

Senator Carper (Delaware) has launched a new page at his official site that includes tracking and comment regarding losses by USPS. His page states…

As we learned this week, the Postal Service is moving forward with cutting hours at post offices and offering retirement incentives for some postal workers across the country. Rather than forcing the Postal Service to continue to rely on these sorts of piecemeal, stopgap measures to cut costs, Congress must work to enact comprehensive reform that provides the tools and resources the Postal Service needs to survive in the 21st Century. The Senate has done this. The ball is in the House’s court. Although the Postal Reform Act of 2011 was passed out of the relevant House committee in October 2011, leaders in the House of Representatives have yet to schedule a vote on the bill. The Senate, however, passed a bipartisan postal reform bill, the 21st Century Postal Service Act, on April 25, 2012.

With each day that the House fails to take action, the Postal Service loses $25 million. Further delays could accelerate an already deteriorating financial situation at the Postal Service that would threaten a mailing industry that employs over 8 million people and generates nearly $1 trillion in economic activity each year. Make no mistake, the Postal Service’s financial problems are dire, but they are solvable if Congress acts to pass comprehensive postal reform legislation.

The Postal Service’s Losses, By the Numbers

$6,500,000,000 Total FY 2012 Postal Service Losses So Far
$500,000,000 What New USPS Cost-Cutting Plan for Post Offices Saves in 1 Year
$25,000,000 What the Postal Service Loses Each Day
16 Days How Long it Currently Takes USPS to lose $500,000,000 – the same amount of savings announced in new USPS plan
$13,000,000,000+ Current Postal Service Debt to U.S. Treasury
143 Days Until USPS has to pay $11.1 billion for future retiree healthcare costs (as of 5/10)
15 Days Since the Senate Passed Comprehensive Postal Reform Legislation (as of 5/10)
211 Days Since the House Reported Its Postal Reform Bill Out of Committee (as of 5/10)
??? Days Until the House Takes Action on Postal Reform Legislation

Visit Senator Carper’s page for more information

The Republican-controlled House of Representatives, on a mostly party-line vote, approved a budget measure Thursday that would require federal employees in both the Civil Service Retirement System and the Federal Employees Retirement System to contribute 5 percent more of salary toward their pensions—in effect, a 5 percent cut in pay phased in for current workers over five years. Click here to read more.

More than 100 U.S. representatives have signed a letter to Postmaster General Patrick R. Donahoe [PDF], urging him to extend the moratorium on the closure of post offices and mail processing facilities, and asking him to refrain from cutting hours at rural offices.

“We write to urge you to extend the May 15 moratorium on post office and mail processing facility closures until the Congress has completed action on postal reform legislation, including any action that would result in cuts to rural postal services such as cutting back hours at rural facilities,” the May 9 letter said.

The passage of a postal reform bill in the Senate “is evidence that Congress is moving toward putting the United States Postal Service on a path to sustainability,” 107 House members said. “We understand that the USPS cannot sustain itself under its current system, and we agree it is up to Congress to act,” they wrote.

Recently the Postmaster General has said there won’t be a large number of closures as soon as the moratorium expires, but he has not agreed to extend the moratorium.

But postal workers, along with many lawmakers and postal customers, are unwilling to rely on his public reassurances that closures will be handled methodically and will not be disruptive.

“The Postmaster General’s positions and plans have changed many times in the last year, but his strategy has been consistent,” said APWU Executive Vice President Greg Bell. “His goal is to cut jobs, close post offices and mail processing facilities, and dismantle the postal network. We must do everything we can to stop him.

“The Postal Service should drop its plans to cut service, and develop a strategy to expand service and strengthen the USPS,” Bell added.

Forty-seven senators have also asked the Postmaster General to extend the moratorium. The four co-sponsors of a Senate bill asked Donahoe to extend the moratorium until after legislation is enacted. In a letter dated April 30, Sen. Joe Lieberman (I-CT), Sen. Susan Collins (R-ME), Sen. Tom Carper (D-DE) and Sen. Scott Brown (R-MA), wrote, “There is considerable concern in the Senate that this approach will unnecessarily degrade the infrastructure which is one of the Postal Service’s most important assets.

“We believe an attempt to proceed with the planned closures — to ‘get in under the wire’ while legislation to the contrary is being considered — would be counterproductive and would violate the clear intent of the Senate.”

On May 2, 43 senators, including 37 Democrats, five Republicans, and independent Sen. Bernie Sanders (VT) also asked Donahoe to extend the moratorium on the closing of post offices and mail processing facilities. They wrote [PDF], “We are deeply concerned that the closing of these postal facilities prior to postal reform legislation being enacted would be devastating to communities around the country.”

However, three Republicans — Sen. John McCain (AZ), Sen. Tom Coburn (OK), and Sen. Bob Corker (TN) — have urged Donahoe to proceed with planned closures and other cutbacks. “Despite the Senate’s passage last week of S. 1789, the 21st Century Postal Service Act of 2012, we believe it is very unlikely that both the House and Senate will come to agreement on legislation that reforms the postal system anytime soon and strongly encourage you to move forward with the cost-saving changes you have previously outlined,” they wrote.

WASHINGTON — The Postal Service ended its second quarter (Jan. 1 – March 31) with a net loss of $3.2 billion, compared to a net loss of $2.2 billion for the same period last year. Despite ongoing management actions that have grown and improved efficiency, the losses will continue until key provisions of the Postal Service five-year business plan move forward.

Without the impact of the non-controllable costs related to mandated retiree health benefit pre-funding payments and accounting for non-cash adjustments for worker’s compensation, the non-GAAP loss for the quarter was $486 million compared to $469 million for the same period last year as shown in Table I below.

The losses are due primarily to legislative mandates such as the unique mandated pre-funding of retiree health benefits, and prohibiting management from making the needed operational and human resource changes required to address these issues under current laws and contracts. Also contributing to the continuing losses are the declining First-Class Mail and Standard Mail volumes. The Congress must act soon to pass legislation providing the Postal Service with the flexibility and speed needed to make the changes necessary for long-term financial viability.

“We are aggressively pursuing new revenue streams and reducing costs in areas within our control,” said Postmaster General and CEO Patrick Donahoe. ”These actions are not enough to return the Postal Service to profitability. The legislative changes outlined in our business plan will enable us to reduce annual operational expenses by approximately $22.5 billion by 2016 and set the stage for long-term financial stability so we can continue to provide secure, reliable and economical universal service to the American public.”

Postal Service actions to increase revenue continue to pay off in the shipping and package service lines of its business. Revenues related to shipping and packages totaled $3.5 billion, an increase of over 13 percent compared to the same period in the previous year, as volume increased 74 million pieces, or 9 percent.

Despite the growth and success of Postal Service shipping and package products, it was not enough to overcome the decline in Mailing Services. Revenue from Mailing Services, excluding Market Dominant packages, totaled $12.8 billion, a 3 percent decrease compared to the same period last year, on a volume decrease of 1.8 billion pieces. The revenue reduction reflects the continued decline in First-Class Mail as consumers continue to turn to electronic alternatives. The second quarter also saw a decline in Standard Mail, attributable to a decline in direct mail advertising spending across a number of sectors as sales prospecting slowed in certain sectors, advertisers used more selective targeting methods and competition from electronic advertising media increased.

“We expect to retain the ability to continue high quality delivery services to all of our customers, and continue to take all actions necessary to make sure that our employees and suppliers will be paid. Without legislative change, we will not have sufficient cash to pay the $11.1 billion required for retiree health prefunding and may be forced to default on other payments due to the Federal Government,” said Chief Financial Officer Joe Corbett.

The Postal Service’s comprehensive business plan addresses these financial challenges through revenue growth programs, process improvements, eliminating excess mail processing capacity and other actions to address underutilized assets as well as improve operational efficiencies. It includes targeted legislative changes such as giving the Postal Service the ability to transition to a five-day delivery schedule, restructuring the retiree health pre-funding, enabling the Postal Service to sponsor its own health care program that is independent of other federal health insurance programs, and returning nearly $11 billion dollars to the Postal Service from its prior overfunding of the Federal Employees’ Retirement System (FERS) which would provide vital cash flow to ease the current liquidity crisis.

Other details of the second quarter results compared to the same period last year include:

• Total mail volume of 39.5 billion pieces, a decrease of 1.7 billion pieces, or 4.1%;
• Operating revenue of $16.2 billion, a decrease of $7 million or less than 1 percent;
• Operating expenses of $19.4 billion, an increase of $938 million, or 5.1 percent, driven by expenses related to the legally mandated prefunding of retiree health benefits payments scheduled to be paid in the final quarter of this year;
• Transportation expenses of $1.7 billion, an increase of $126 million, or 8.1 percent, driven by rising fuel costs. Other expenses of $2.3 billion, a decrease of $133 million, or 5.6 percent.

These results bring the year to date net loss to $6.5 billion, compared to $2.6 billion for the same period last year.

Table 1 

Complete financial results are available in the Form 10-Q, available at http://about.usps.com/who-we-are/financials/welcome.htm

May 09 2012

ROCKEFELLER STATEMENT ON NEW POSTAL SERVICE PLAN TO LIMIT HOURS AT ALMOST 500 WV POST OFFICES

WASHINGTON, D.C. — Senator Jay Rockefeller today issued the following statement on the U.S. Postal Service’s decision to reduce hours at 13,000 post offices nationwide, and almost 500 in West Virginia.

“On its face, this move looks like an improvement over the previous proposal to flat out close 150 post offices in West Virginia,” said Rockefeller. “But I continue to be very concerned about the Postal Service’s constantly shifting plans and lack of information about how its proposals will impact jobs and services in our state. This new plan will potentially impact far more West Virginians and it fails to take into account the many other options for reducing costs besides cutting postal jobs and services in rural areas like West Virginia.

“The Postal Service must fix its worsening finances, but it doesn’t have do that at the expense of our state’s jobs and services. We need to take responsible steps forward and I intend to have a very candid conversation about this with the Postmaster General during our meeting tomorrow.”

On May 7, Rockefeller sent a letter to the Postmaster General urging the Postal Service to reconsider closing 150 post offices and consolidating mail processing centers in West Virginia as these actions unfairly target jobs and postal services in West Virginia, as well as other rural states. He also asked the Postmaster General to extend the current moratorium on any post office closings and mail processing center consolidations in the state. Click here to view the letter.

On March 20, Rockefeller, Manchin, and five other Senators sent a strongly worded letter to the Postmaster General pressing for details about how the Postal Service is spending its money and identified ways to save billions of dollars and raise new revenue before pushing ahead with drastic cuts to post offices and other facilities. Click here to view the letter.

The Postal Service has announced a new Post Office structure plan (POStPlan) that will preserve small rural post offices by reducing the retail hours to match customer use. The plan will impact Postmasters in EAS 16 and below office.

Here’s what it means to impacted Postmasters;

Of the more than 17,000 offices under review, more than 4,500 offices will be upgraded, with approximately 13,000 offices being part-time. Of the nearly 13,000 part-time offices, approximately 9,000 will be staffed by non-career Postmasters, and more than 4,000 will be staffed by part-time career Postmasters.

Administrative Post Offices (APOs) are Level 18 and above offices where the Postmaster will assume administrative responsibility for between one to ten RMPOs. All level 18 and above office are leveled by Work Service Credits (WSCs.)

Remotely Managed Post Offices (RMPOs) are current EAS 16 and below offices that will be reclassified as levels 2, 4 and 6 offices . Reclassification of these offices will be based on FY 2011 adjusted earned hours in SOV/CSV.

NAPUS will have a representative who will head an SOV/CSV focus group and he is currently working with USPS Headquarters reviewing SOV formulas. Additional information on SOV can be found here SOV Overview, SOV Tracking Log for Delivery Admin Pick Box, SOV Delivery Admin Earned Workhours How To

POStPlan office levels will be as follows;

• Level 2 – Between .01 – 1.99 hours adjusted earned workload/day. This will be a 2 hour office and staffed by a non-career Postmaster Replacement (PMR.)
• Level 4 – Between 2.00 – 3.99 hours adjusted earned workload/day. This will be a 4 hour office and will be staffed by a non-career PMR.
• Level 6 – Between 4.00 – 5.74 hours adjusted earned workload/day. This will be a 6 hour office and will be staffed by a career part-time Postmaster.
• Level 18 – 5.75 hours adjusted earned workload/day and will be staffed by a full time career Postmaster.

Saturday hours and collection times will remain the same as before POStPlan was implemented.

Postmasters currently in EAS 16 and below offices will not be impacted by the new structure plan until 2014.

Vacancy Announcements for Postmasters Only

In the near future, there will be two limited competition postings of vacant offices, including the newly upgraded EAS 18 offices, which will be posted for Postmasters only.

The Postal Service has also announced a Voluntary Early Retirement (VER) and incentive offer for non-PCES Postmasters. The one-time cash incentive of $20,000, will be payable to all full time Postmasters in two installments (December, 2012 and December 2013.) Part-time Postmasters will receive pro-rated payments on the same dates. All eligible Postmasters will receive a retirement kit and a retirement annuity payment estimate from the Postal Service next week. Additional information on the VER and incentive guidelines will be posted as Frequently Asked Questions (FAQs) on Workforce Connection , on LiteBlue, at http://www.liteblue.usps.gov/.

For a list of offices impacted by POStPlan, go to POST PLAN DATA.xls

Additonal information on POStplan will be provided as NAPUS continues to work through the process with USPS Headquarters. Please check the usps.gov website for POStPlan FAQs. If you still have questions, please forward them through your NAPUS National Vice President, by going to the NAPUS website and click on Contact Us, Executive Board.

For more information on POStPlan, please check the President’s Update on the NAPUS website.

Charlie Moser
May 9, 2012

Related: Mandatory Stand-Up Talk (PDF)

WASHINGTON – U.S. Senator Susan Collins, one of the lead sponsors of bipartisan, comprehensive postal reform legislation, issued the following statement regarding the Postmaster General’s comments today about rural post offices.

Postmaster General Pat Donahoe announced that none of the 3,200 post offices slated for closure last year will be forcibly shuttered. However, about 13,000 post offices will either have work hours reduced, be co-located at a nearby business such as the local pharmacy, merged with another location, or service will be provided to residents and businesses in the affected community by either rural carrier or highway contract route.

“I am cautiously optimistic that the Postmaster General has now devised a plan that will help preserve some essential postal services for rural America, while allowing the Postal Service to reduce its costs as it must do. Reduced hours at certain post offices or their co-location with another facility or a retail store, if properly designed, could well accomplish both goals. To be effective, such a plan must, however, take into account people’s schedules and post offices should be open at times convenient to their customers. The fact is, there are many options to cut costs and expand revenue while preserving service, such as: reducing the size of processing plants without closing them, shifting hours of some post offices, permitting other state or local services to be administered at post offices, or moving tiny post offices into grocery or other stores within the same community.

“It’s good news if, indeed, most of the 3,200 smaller post offices currently targeted by the Postal Service will not close, but rather that creative ways to reduce their costs will be explored. Involving communities and providing different options for mail service will both save the Postal Service money and also continue to ensure timely and effective access to postal services for customers. There should be clear minimum standards for service — which we establish in the bill just passed through the Senate — and communities should have a real voice in the decision.

“It is good news as well that the Postmaster General apparently has decided to implement some of the common-sense suggestions many of us have been urging for more than a year. I remain troubled that processing facilities could still be closed beginning just next week, which makes no sense at all given the progress on postal reform legislation. I expect to discuss this issue with the Postmaster General later today.”