Thousands of postmasters head for the exit, others play musical chairs

June 29, 2012

Some preliminary numbers are circulating on how the Special Incentive Offers are going.  About 45,000 mail handlers were offered $15,000 to retire, and as of June 22, the original deadline, 2,800 had decided to accept (2,500 optional and 260 VER).   The response is somewhat less than projections based on previous offers. 

It’s a different story for postmasters, however, and their response has apparently taken the Postal Service by surprise.  Based on past history, around 2,000 postmasters would have been expected to take the offer of $20,000.  But as of June 22, over 3,600 postmasters had decided to retire (2,500 optional and 1,100 VER).  With the deadline extended to July 2, the total may reach something like 4,500.

A few weeks ago, when the Postal Service saw these kinds of numbers coming in, it announced that due to the “overwhelming response” to the incentive offer, so it would be necessary to postpone the retirement date for some postmasters from July 31 to August 31 or September 30.  Staggering the retirement dates will give the Postal Service a little more time to adjust, but it’s not going to be easy staffing all these post offices. 

Most of the retiring postmasters run post offices that will have their hours cut under POStPlan.  Those offices will need temporary full-time replacements for a couple of months, and then they’ll need new part-time workers when the hours are cut, starting in the fall.  It’s not just these that will require new staffing, however.  Many postmasters who are retiring work at regular full-time offices not part of POStPlan.  When they leave and a position opens up, a POStPlan postmaster will want the job, so that postmaster’s post office will need new workers too.

The Postal Service is going to get a quick look at what it’s like to staff 13,000 post offices with part-time employees.  It’s possible that as many as 7,000 post offices will need to be staffed over the coming months.  Personnel at other offices will need to be shifted around, new workers will need to be hired and trained, and postmasters at Administrative Post Offices (APO) will need to learn how to manage part-time workers at a Remotely Managed Post Office (RMPO).  It could be a real headache.  One thing is for sure: the quality of service at thousands of post offices is going to decline very rapidly.


The union throws the Commission a Hail Mary on the change in service standards

June 25, 2012

Sometime this week, the Postal Regulatory Commission will issue a ruling on the APWU’s Motion for an Emergency Order, which seeks to prevent the Postal Service from implementing a change in service standards for First Class mail on July 1. 

If the PRC does not issue an order to stop the Postal Service, overnight delivery will come to an end for Inter-SCF First-Class Mail and periodicals.  That’s mail that originates or destinates outside of the geographic area served by a sectional center facility (SCF).  It’s basically regional mail, in between local and long distance, and it represents about 20 percent of First Class mail.  The other 80% of overnight delivery is Intra-SCF mail — the  “turnaround” mail that originates and destinates within the same geographic area served by an SCF — it's basically local mail that "stays in the building" — and it will be preserved until 2014, then that will be the end of overnight delivery for First Class mail.  

The APWU says the Postal Service should wait until the PRC issues its Advisory Opinion before implementing the changes, sometime around Labor Day.  The Postal Service says it won’t wait, and it’s filed an Opposition brief to the union’s request, arguing that the PRC doesn’t have the authority to issue an injunction, and even if it did, there’s no justification for it. 

The APWU argues that the 1970 Postal Reorganization Act (PRA) — the legislation that created the Postal Service, the PRC and Advisory Opinions — says the Postal Service must request an Advisory Opinion when it’s planning a change in service with nationwide impacts.  The Postal Service replies that the Act says only that it must request an Opinion; the Act doesn’t say that the Postal Service must wait until the Opinion is issued. 

The APWU says that if the Postal Service implements the changes before the Opinion is out, it would render the legal requirement for an Opinion “nugatory” (of no value).  The Postal Service responds that if it were expected to wait for an Opinion, the regulations would not specify that the request for an Advisory Opinion must be submitted “not less than 90 days in advance of the date on which the Postal Service proposes to make effective the change” (39 CFR § 3001.72). 

The APWU argues that if the service changes have already been implemented when the Opinion comes out and the Commission makes a recommendation against the changes, the Postal Service will say that it would impose too great a cost on itself and its customers to undo the changes.  The Postal Service replies that if it proves desirable to reverse the changes, mailers and the Postal Service can adjust.  In the meantime, says the Postal Service, a delay would lead to additional expenses and require it to revise its consolidation plans yet again.   (All the documents concerning the APWU Complaint and motion for an emergency order are in docket C2012-2.) 


No stopping summer consolidations

As good as the arguments may be for an emergency order, it’s not likely the Commission will rule in favor of the AWPU’s request.  Such an order would say, in effect, that the Postal Service must wait until the Opinion is issued.  As the Postal Service notes in its Opposition brief (p. 14), PRC Chairman Ruth Goldway has already expressed her view that the Postal Service needn’t wait for an Advisory Opinion to be issued before it implements the change in service standards.

The APWU knows this, and it has known for a long time that the change in service standards would most likely be implemented before the Opinion was issued.  In March, USPS VP David Williams told the Commission that the Final Rule on the changes would be published in the Federal Register in mid-April and the Postal Service would immediately begin the process of helping customers to adjust to the new system.  Everyone knew that the Opinion would not be out until months later.

Opportunity knocks: The Postal Service invites postmasters to replace themselves

June 22, 2012

The Postal Service has notified postmasters considering retirement that they’re welcome to apply for a job as a Postmaster Relief (PMR).  It’s “an opportunity to continue to serve postal customers” — and an opportunity to earn $11.76 an hour. 

Who could pass up an opportunity like that?  Who wouldn’t want to give up a good-paying full-time job, transition into retirement a few years before you’re ready, and then take your old job back for half the day and at a third your hourly wage?

The Postal Service must be counting on quite a few takers.  Perhaps there will be a lot of postmasters who figure that between their pension, the $20,000 VER offer, and a few hours a week as a PMR, they’ll be able to get by.  Maybe some of them will simply to want to “continue serving their community.”

In any case, the letter to postmasters from the Postal Service is rather vague about some of the details, and there are a couple that warrant a closer look. 

The letter says, “Under the rules that allow the Postal Service to reemploy annuitants without a reduction in their retirement annuity, the Postal Service must first post the PMR position.  If, as we expect in most cases, no qualified applicant applies for the position, we will then select a retired postmaster to fill the vacancy.”  The letter goes on to say, “Your ability to work in this position without reduction to your annuity is subject to specific conditions and a limited duration.”

In order to get some sense of what’s behind those comments, it’s necessary to go back to the statute and regulations that govern reemployment of government retirees.


Decoding the rules

Title 5 of U.S. Code, sections 8344(i) and 8468(f), contain the laws concerning federal retirees, annuities, and re-employment.  Generally speaking, retirees don’t go back to work for the government, and when they do, their annuities are usually reduced.  But as section 8344(i) describes, there are exceptions. 

The Director of the Office of Personnel Management (OPM) can issue waivers “on a case-by-case basis for employees in positions for which there is exceptional difficulty in recruiting or retaining a qualified employee.” 

The OPM can also delegate authority to the head of an agency to make such exceptions “for an employee serving on a temporary basis, but only if, and for so long as, the authority is necessary due to an emergency involving a direct threat to life or property or other unusual circumstances.”

These sections of Title 5 are implemented by the Code of Federal Regulations, which provides more details.  The part entitled “Reemployment of Military and Civilian Retirees to Meet Exceptional Employment Needs” (5 CFR 553) says that there are four categories of case-by-case waivers: (1) An emergency hiring need; (2) a severe recruiting difficulty; (3) a need to retain a particular individual uniquely qualified for a specific 
project; and (4) requests based on other unusual circumstances not rising to the level of an emergency.

The CFR presents various rules about how each of these criteria should be applied, and this Q & A fact sheet from the OPM explains many of the details.  The fact sheet outlines the circumstances under which an annuitant can be reemployed under the criterion of “severe recruiting difficulty.”

According to the OPM, “The individual for whom an agency is seeking a waiver based on a severe recruiting difficulty must be the only qualified candidate described in the agency’s recruiting efforts.  For these purposes, a minimally qualified candidate is a qualified candidate.”

The fact sheet goes on to say, “Agencies MUST submit documentation for requests based on a severe recruiting difficulty,” and this documentation should include, among other things, a description of the length, breadth, and results of the agency’s recruiting efforts, including details about the number of applicants and an explanation as to why none of the candidates was selected.


Turning up the heat: The DC Hunger Strike

June 20, 2012


On June 25th, a band of protestors will travel to Washington DC to stage a four-day hunger strike calling attention to the Postal Service’s plans to reduce service and cut jobs.  That’s just days before the Postal Service implements the change in service standards that will end overnight delivery for about 20 percent of First Class mail, a prelude to further service reductions next year and in 2014.

“Save the Post Office” joins over 400 community groups, clergy, citizens, and postal workers endorsing the strike.  You can see the endorsement list here, and you can add your name here.  (By the way, the form asks for your phone number and street address, but those details won't appear in the endorsement list.)

The main theme of the Hunger Strike is that cuts to service will succeed only in driving business away from the Postal Service and sending it into a death spiral.  Slowing down the mail, closing plants, closing post offices and reducing window hours, and putting tens of thousands of postal employees out of work is not the way to solve the Postal Service’s financial problem. 

That problem can be addressed with a simple act of Congress:  Repeal the 2006 Congressional mandate that requires the Postal Service to pay $5.6 billion a year into its Retiree Health Benefit Fund (RHBF) — to cover health benefits decades in advance.  That mandate is the main cause of the postal deficit, and it’s completely unnecessary.

As the USPS Office of Inspector General has observed in a letter to Senator Bernie Sanders, “Prefunding retiree health care is rare in the public and private sectors.  We have been unable to locate any organization, either public or private, that has anything similar to the Postal Service’s required level of prefunding heath care benefits.”

If it’s so rare, why did Congress create such a fund in the first place?  Back in 2002, the Office of Personnel Management (OPM) determined that the Postal Service was on course to overfund the CSRS pension fund by over $70 billion.  The Government Accountability Office said the overfunding could top $100 billion.  But reducing the Postal Service’s payments into the pension fund would have added to the federal deficit by $4.5 billion a year.  One of the main reasons Congress decided to have the Postal Service prefund retiree health care was to keep those billions flowing into the Treasury. 

If Congress had been concerned simply with having enough money to pay for retiree health care, it could have decided on a 40-year payment schedule, as the OPM recommended.  But the health care payments would have been too small to balance out the $4.5 billion reduction in payments to the pension fund.  So Congress came up with a ten-year payment schedule — hence the $5.6 billion the Postal Service is now required to pay into the RHBF.

An endless stream of news reports repeats the message coming from Congress and postal headquarters:  The Postal Service has lost $25 billion over the past five years, and If nothing is done, the Postal Service will go broke.  And it's all because of the Internet.

But as the Postal Regulatory Commission stated in its most recent Annual Compliance Determination, “The primary reason for the losses is the overly optimistic RHBF prefunding requirement.  If there had been no prefunding requirement, the cumulative 5-year loss would have been reduced to $4.4 billion.”

So over 80 percent of the $25 billion deficit was caused by the prefunding mandate.  As for the remaining $4.4 billion, about a third of that loss occurred in 2009 and 2010 and can be attributed directly to the recession.  The big loss in 2011 was due partly to the continued weakness in the economy, but it has another cause — and it's not the Internet.  Postal management deserves a good deal of the blame for recent revenue losses.  Whether by accident or design, it has helped to undermine the relevancy and viability of the Postal Service by constantly invoking insolvency and “Greece,” by announcing one cost-cutting plan after another, by reducing service and by promising to reduce it more. 

In the end, however, Congress must take responsibility for the crisis.  “Not the Internet, not private competition, not the recession — Congress is responsible for the postal debt,” explains Jamie Partridge, a retired letter carrier traveling from Portland, Oregon, for the Hunger Strike.    “Corporate interests, working through their friends in Congress, want to undermine the USPS, bust the unions, then privatize it.”

“We will not stand by as our beloved Postal Service is destroyed,” says Tom Dodge, a postal worker from Baltimore who will be joining the Hunger Strike.  “We will shame Congress and denounce the Postmaster General.  We will engage in dramatic actions on Capitol Hill and at the USPS Headquarters to turn up the heat on decision makers.”

For more about the Hunger Strike, visit the website of Communities and Postal Workers United, a national grassroots network that’s working to share information and expertise in order to preserve customer service and fight the privatization of the Postal Service.

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