OopsPlan: The Postal Service forgets to count PMRs

July 7, 2012

When the Postal Service presented POStPlan to the Postal Regulatory Commission in May, it would not put a number on how much the plan would save, but the USPS press release said $500 million a year.  The Commission asked the Postal Service to provide the calculations that led to this estimate, and the Postal Service submitted a spreadsheet showing how much it currently costs to staff 22,000 post offices, and how much it would cost if 13,000 of them were staffed with part-time workers and the hours of operation were reduced to match revenues (USPS-LR- N2012-2/6).

Using the average salary for postmasters at each level of post office (11, 13, 15, etc.), the spreadsheet estimates the total cost for labor under the current system at $1.66 billion a year.  Under POStPlan, labor would cost $1.14 billion.  That yields a net savings of $517 million.  (There’s more about the cost savings calculations in this post.)

A couple of day ago, the Postal Service responded to a question about cost savings posed by the PRC's Presiding Officer, Nanci Langley: “In calculating the cost savings as shown in Library Reference No. 6, how does the Postal Service treat offices with a current Postmaster vacancy and which may be managed by (a) an Officer in Charge (OIC) and (b) a Postmaster Relief (PMR)?” 

The Postal Service replied that the average used in the calculations was “an average of the salaries for Postmasters currently assigned to each of the respective levels.  The Postal Service used this average salary for offices with an OIC or PMR covering the assignment.” (POIR 4-6)

In other words, the Postal Service based its cost-savings estimate of $500 million on calculations that average the salaries of postmasters, without taking into consideration the fact that in over 3,000 POStPlan post offices, there is no postmaster.  Instead, there’s a non-career employee who earns a half or third as much.  The savings from using these PMRs have therefore already been realized, and they are not part of the savings for POStPlan.  By not counting PMRs, the Postal Service has significantly overstated the cost of labor under the current system.  The $500 million figure thus overestimates the savings by a considerable amount.

The PRC, or one of the participants in the Advisory Opinion process, may ask the Postal Service to provide a revised cost savings estimate using the actual salaries of employees at the POStPlan post offices.  While we wait for the results, here’s a rough estimate of how including PMRs will affect the cost savings analysis.  

Push Back in Pasadena

July 5, 2012

Earlier this week, members of Occupy Democracy - Pasadena joined postal workers, union officials, and area politicians to hold a rally near the steps of Pasadena’s City Hall to protest the closing of the Mack Robinson mail distribution center, where the consolidation process is set to begin at the end of this week.  

“They’re calling it a ‘limited consolidation’ but it’s limited only in name,” Congresswoman Judy Chu told the crowd of 150.  “If the post office goes through with its plan, it will have significant consequences for San Gabriel Valley residents, businesses, and our dedicated postal office workers.”

“I remember when we came here to dedicate this facility and I’m here to say that Mack Robinson is part of our community,” said Congressman Adam Schiff. “These are good, dedicated public servants who deliver our mail, who bring us our packages, and they are part of our community.”

The consolidation will mean the loss of 260 jobs, which will cost the city millions in lost revenue.  Most of these workers will have to commute long distances to other locations, move away, or find another job.  But the problem is not just in Pasadena and the other 230 communities where processing plants will be closed. 

The problem is what’s happening to the mail. 

The chorus of people chanting that the Postal Service needs to be given the freedom to act “like a business” — meaning the freedom to close plants and post offices and lay off tens of thousands of workers — should read the piece by Ron Nixon in today’s New York Times: “With Cuts on the Way, Postal Service Customers Already Bemoan Delays.”

 “Even before the Postal Service begins closing hundreds of processing centers to cut costs, several businesses say they are beginning to see a decline in service,” writes Nixon.  The article goes on to cite many examples of newspapers arriving when the news isn’t news anymore, advertising flyers arriving after the sale they’re promoting has ended, and businesses losing customers because of all the delays.

“The problems only seem to be getting worse,” Max Heath told the Times.  “And the odds of it getting better is almost zero when you consider the changes the Postal Service is about to make, closing plants and lowering its delivery standards.”   Heath knows what he’s talking about.  He's been in the community newspaper business for 45 years, and he's now a consultant for the Publishing Group of America, whose magazines are distributed through small newspapers.  In testimony before the Postal Regulatory Commission earlier this year, Heath said,  "“Frankly, in my view, I think the Area Mail Processing system has been quite a disaster for most mailers,".

Postal workers may be the ones taking to the streets right now because they are most immediately affected by the consolidations.  But it’s the whole country that’s going to come out at the losing end. 

There’s more about the Pasadena fight in this excellent post, and there’s more on this week’s demonstration here and here.

(Photo credits: Patrick Briggs.  Photos here.  Slideshow created with flickr slideshow.)

Eureka! The Postal Service finds gold in California

July 3, 2012

The Postal Service has been actively selling off historic post office buildings for over a year now.  About forty have been sold or put up for sale.  They’re scattered around the country, but for some reason more than a third of them are in California.

Last week news came out that one of the most beautiful post offices in the country would be sold, the 1915 post office in Berkeley.  The protest is already beginning (SF Gate and Daily Californian).

The Berkeley post office was built during a period when many believed architectural beautification could bring harmony to urban living, explains Gray Brechin, UC-Berkeley geography professor and founder of the Living New Deal.  “The federal government went to special lengths to give Berkeley one of the handsomest postal facilities in the state and possibly the nation,” says Brechin. “It represents the high idealism of the City Beautiful Movement.”

Apparently the country is done with that kind of idealism, and rather than building beautiful public places, the federal government is selling them off.  What’s going on in California is one of the main reasons the National Trust named the Historic Post Office to its list of America’s 11 Most Endangered Places of 2012.

Historic post offices are highly prized by their communities.  They anchor the downtown area, help local businesses, enable people to walk to the post office, and elicit pride of place.  People may complain about the long lines, but they love their grand old post office.   

If something doesn’t stop the sell-off, it looks as though the Postal Service is prepared to dispose of all 2,200 of the country’s historic post offices.  Postal officials seem to think that this legacy belongs to them, to do with as they please.  They forget that these post offices are the property of the American people.  They seem unaware of the magnitude of the crime they're committing. 

The Postal Service says it needs the money these sales bring in, and the old buildings cost too much to maintain, especially when a lot of space is underutilized.  But the sales bring in a relatively small amount of money in the context of the USPS budget, the maintenance costs are less than the rent the Postal Service pays on the replacement post office, and the underused space is the Postal Service's own fault.  Rather than making the most of the downtown location, the Postal Service moves letter carriers to other locations (which also cost money to lease or maintain), so that the mail processing that used to go on in the back now goes on somewhere else, leaving just the retail services in the building.

The explanations offered by the Postal Service disguise what's really going on.  The Postal Service is selling off its properties because divestiture of assets, along with outsourcing, is one of the main steps in the process of privatization.  The plans have been in the works for a long time.  Back in 1998, President Reagan's Commission on Privatization recommended selling off "obsolete buildings in central business districts" — historic downtown post offices — to help move the Postal Service toward privatization.  You can read all about it in the Commission's report, "Privatization: Toward More Effective Government" (pp. 122-125).


Why California?

California has fourteen historic post offices that have been sold, put on the market, or planned for sale — the most of any state in the country.  Connecticut is number two, with five (most of them in the “Gold Coast” area around Westport).  Several other states have one or two. 

One might assume that so many historic post offices are being sold in California because the state has an unusual number of them, but that explanation doesn't hold up.  California ranks fifth in terms of how many historic posts offices it possesses, 106.  New York is number one (with 238); Pennsylvania, second (182); then come Illinois (170) and Ohio (126).    Yet these states have only one or two historic post offices for sale.

Of California's approximately 1,800 post offices, the Postal Service owns around 600.   Using fifty years old as a rule of thumb for listing on the National Register of Historic Places, over a hundred California post offices are eligible and 24 are currently on the Register.  (A list of California’s historic post offices is here, a map here, and a spreadsheet showing how post offices and historic buildings break down state-by-state, here.)

Percentage-wise, California is not at all unusual in the number of historic post offices it possesses.  About 6 percent of the state’s post offices are historic, which ranks California 29th.   By contrast, in the New England states, about 13 percent of the post offices are historic.  

There must be another reason why the state is seeing so many sales compared to other states. One possible explanation is that postal management in the Pacific District is simply being more aggressive about selling post offices than other districts, perhaps to please postal headquarters back east.  It’s also possible that the California post offices are among the country’s most valuable, and the Postal Service wants to work on the big-ticket items first.  That would also explain why it sold off the post offices in Connecticut’s Gold Coast and Palm Beach, Florida.  Or maybe the Postal Service is just starting the divestiture process on the West Coast, intending to work its way east, so it’s only a matter of time before other states suffer their share of the damage. 

Reducing hours at post offices: A history of transparency problems

June 30, 2012

POStPlan, the Postal Service’s plan to reduce hours at 13,000 post offices, was not invented out of thin air.  The Postal Service has been reducing hours at post offices for many years.  But try getting any information from the Postal Service about the scope or effects of those reductions.

In 2004, the GAO issued a report about efforts to optimize the retail network, and it discusses reducing hours at post offices.  After noting that the Postal Service closed 440 post offices in 2003, the GAO says, “According to USPS, it has also adjusted hours at existing post offices from time to time to reflect customer demand.”

The GAO asked for details, but the Postal Service “could not provide information on the number of post offices where changes in hours occurred in fiscal year 2003.”


What we've got here is a failure to communicate

The GAO report goes on to explain how the Postal Service adjusts hours based on the number of transactions and customer visits.  The GAO then states, “USPS reported that its efforts to increase efficiencies in its retail area have resulted in a decrease of almost 5 million workhours from fiscal years 2002 to 2003.”

Given that this number appears at the end of a paragraph about reducing hours at post offices, one might get the impression that the 5 million workhours were eliminated thanks to these reductions.  But that’s probably not the case.  If the reduction in hours of operation averaged 4 hours a day per post office, 5 million hours would involve 4,800 post offices. 

It’s not likely that the Postal Service reduced hours at nearly five thousand post offices in one year.  The 5 million workhours must include many other ways to reduce retail hours, like opening fewer windows in post offices where there are several and eliminating window clerk jobs. 

The GAO report thus offers no relevant information about cutting hours of operation at post offices.  It contains no details about how many post offices had their hours reduced, how many hours the average reduction was, or how the reductions impacted revenues, customers, and communities.  The Postal Service “could not” provide this information — or it would not.

Given the Postal Service’s inability or unwillingness to share information about its practice of reducing hours, it should come as no surprise that the 2004 GAO report is entitled “USPS Needs to Clearly Communicate How Postal Services May Be Affected by Its Retail Optimization Plans.”   

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