September 25, 2013
The Postal Service’s August financial report came out yesterday. With just one month left in the fiscal year, it looks as though 2013 will mark a turnaround in the fiscal condition of the Postal Service.
Revenues are up 1.4 percent over the same period last year (i.e., eleven months, October – August), and they are 2 percent better than expected in the plan.
The bottom line shows a net operating loss of $4.95 billion. But that includes a payment of $5.13 billion to the Retiree Health Benefit Fund (RHBF). Take away the prepayment, and the Postal Service would be showing a net operating profit of $182 million for the year so far.
For July itself, there was a net operating loss of $634 million, which includes a RHBF payment of $467 million. Exclude that, and the loss for the month was $167 million.
As usual, First Class mail volumes continue to drop (down 3.9 percent for year-to-date), while Standard mail continues to rise (up 1.6 percent). Packing and shipping services are doing fine, with volumes up 4 percent and revenues up 8.4 percent.
The news media continue to report the $!6 billion loss last year, but the financial condition of the Postal Service is nowhere near that bad. The media conveniently neglect to mention that this deficit included two payments to the RHBF (one for 2011 and one for 2012), and news reports about this year’s financial statements continue to omit reference to the RHBF payments, at least in the headlines.
Overall, were it not for the prefunding obligation, the Postal Service would basically be breaking even this year, just as it’s supposed to do.
But a decent financial report is not the stuff of headlines, and it doesn’t really help the Postmaster General’s case for an exigent rate increase or his urgent plea to Congress to enact postal reform. In the topsy-turvy world of the Postal Service, good news is bad news, and a profit of $181 million is a loss of $5 billion.
Postmaster General pledges no post office closures during postal reform but closes post offices anyway
September 25, 2013
On September 19, Postmaster General Donahoe testified to the Senate Homeland Security Committee about the state of the Postal Service and the dire need for legislation. During his testimony, the PMG made a pledge not to close post offices or processing plants while Congress debated postal reform. It’s not a pledge the PMG is likely to keep. In fact, he was already breaking it even as he made it.
The PMG’s promise about not closing facilities occurred during an exchange with Montana Senator Jon Tester. (It occurs at 1:16:55 in the video. The exchange was also reported on KPAX News.) Here’s how it went:
Senator Tester: Is there going to be further consolidation of mail processing facilities or post offices while we're doing this legislation and debate in committee?
PMG Donahoe: No [very quiet, barely audible]. The bill as it's written puts a two-year freeze on mail processing facilities. We have some scheduled for 2014. We would not advance any of those things to try to get under the wire. From a post office perspective, when I visited Montana last year, people told us, “Keep our offices open, keep our local identity. If you have to change window time, we understand that but give us access to mail.” And we've done that.
Senator Tester: Fair. So what you're saying is there wouldn't be any post office, mail processing centers closed while we're debating this bill before it becomes law?
PMG Donahoe: [Interjects “No, No” while Tester is speaking, then says:] Nope, we've done what we needed to do for this year, and if any further changes require service standard changes we will not do that.
If there was any ambiguity in the Postmaster General’s pledge not to close post offices and facilities, consider this exchange a little later in the hearing (at 1:24:27). The PMG is responding to a question from Senator Heitkamp of North Dakota, who had been asking about opportunities for digital innovation.
Senator Heitkamp: I only have a few more seconds here. I do want to point out that if you close every rural post office in North Dakota, you won't have an opportunity [for digital innovation].
PMG Donahoe (interrupting): There's no proposal to close any post offices. As a matter of fact, in your state we are expanding some post offices, Williston and a few others, because of the oil boom. We're responding to that and there's no interest in closing post offices — you've never heard me say that. We've made changes in the POStPlan that helps us in the bottom line perspective, but it gives customers what they're asking for — access to post offices and rural town identity.
Mr. Donahoe’s pledge not to close post offices did not go unnoticed. Senator Tester’s website immediately featured a press release entitled, “Tester Secures Major Concession From Top Postal Service Official.” It begins like this:
“Senator Jon Tester, the nation's number one defender of reliable mail service in rural America, today secured a major victory for Montana's rural mail customers. Postmaster General Patrick Donahoe pledged to Tester that the Postal Service would not close any more post offices or mail processing facilities while Congress debates postal reform legislation.”
It should be pretty clear then that the Postmaster General pledged not to close post offices while Congress debates reform. Unfortunately, that pledge was being broken virtually as the PMG was making it. The Postal Service is busy closing post offices.
Here are just a few examples of closures and pending closures, from the days before and after the PMG’s testimony. Considering that the debate on postal reform has been going on for two years now and will probably drag on for many more months, expect this list to keep on growing.
September 24, 2013
BY MARK JAMISON
On September 12, we reported this story on Jekyll Island, Georgia, where the Postal Service apparently attempted to end delivery service for the island’s residents and businesses in exchange for maintaining a post office. The island is owned by the state and administered by the Jekyll Island Authority. The attorney for JIA in charge of negotiations with the Postal Service thought the post office might be closed and trading away home delivery was the best way to keep it open. Many people in the community disagreed and argued that JIA had no right to make this tradeoff.
In an undated letter delivered to Jekyll Island residents on September 18, the Postal Service reversed course and announced that both delivery service and the location and hours of the present post office would remain the same, at least for now.
The letter, signed by USPS District Manager Charles J. Miller, begins by saying: “There has been some misinformation recently circulating in your community regarding the future of mail delivery service on Jekyll Island.”
The misinformation Mr. Miller refers to began when the JIA circulated a letter indicating that the JIA had decided, after discussions with the Postal Service, to trade the residents’ current city delivery for guarantees that the island would continue to have a post office, which will soon relocate to space the JIA owns in the island’s historic district. Those discussions were laid out in a series of e-mails between Chris O’Donnell, the JIA attorney, and Damian Rawski, postmaster for Brunswick, Georgia, the office that administers mail service on Jekyll Island.
The announcement of the proposed trade-off stirred local residents to action and generated news coverage by the Jacksonville-based Florida-Times Union as well as Save the Post Office. Officials at the USPS North Florida District in Jacksonville did not respond for requests for clarification from STPO, and they told residents that they had no knowledge of the negotiations between Mr. O’Donnell and Postmaster Rawski, even though a chain of e-mails indicates that Frank Stephens, Manager of Operations Programs Support, was cc’ed throughout. In the letter from Mr. Miller, Mr. Stephens is also listed as the postal contact for any questions the residents may have.
Still left unresolved is the ultimate fate of the post office on Jekyll Island. The office is currently housed in a temporary trailer with a lease running through May of 2014. The JIA has indicated that the temporary trailers, which also house other Jekyll Island businesses, will be removed after a new shopping center is completed. In a meeting of the JIA on Monday, September 16, C. Jones Hooks, the executive director of JIA, stated that the authority would leave the matter of delivery up to the Postal Service, according to Bonnie Newell, a resident who attended the meeting. No mention was made of the JIA’s previous offer to house the post office in the historic district.
It appears for the moment that the issues on Jekyll Island have been resolved by maintaining the status quo. That’s good news for the folks on the island, but what happened on Jekyll Island illustrate several problems with how the Postal Service operates, and it’s not good news for those concerned about the future of postal services in this country.
September 20, 2013
The Postal Service has announced plans to close the Ewa Station post office on Renton Road in Ewa Beach, West Oahu, Hawaii. In its “proposal to close,” the Postal Service gives two reasons: There are alternate sites within a short radius, and “over the past several years, this office has experienced low or declining revenue and/or volume.”
It should come as little surprise that revenues at the Ewa Station have been declining. Several years ago, the hours at the post office were reduced from eight a day to half a day, and then in 2011 they were reduced to just two hours a day, noon to 2 p.m., with no hours at all on Saturday.
Even operating just ten hours a week, the Ewa Station post office does pretty well. From 2008 through 2012, revenues averaged about $96,000 a year. The annual cost savings will be something like $48,000 or $60,000 — the proposal to close provides two contradictory numbers — which means that it costs about that much to run the office. In other words, the Ewa Station makes a profit on the order of around $40,000 a year.