A former postal employee in Minto, N.D., charged with embezzling money has been sentenced to a year of probation and 75 hours of community service.
Laura Satterlund, 34, has paid back nearly $4,900 to the U.S. Postal Service, according to minutes from Monday’s sentencing in federal court.
Full story: Former Minto, N.D., postmaster sentenced for theft | Grand Forks Herald | Grand Forks, North Dakota.
A new report from the postal service’s Inspector General says that the USPS has over-funded its FERS retirement obligations by $6.8 billion:
Consistent with other retiree benefit obligations, the Postal Service is being unfairly burdened for its share of the FERS pension obligation. The OPM projected a $6.8 billion surplus in the Postal Service’s FERS obligation at the end of FY 2009. The OPM acknowledged that the federal government’s FERS obligation, excluding the Postal Service, was unfunded by $7.4 billion at the end of FY 2008.8 The funding status for the Postal Service, as well as the federal government, is calculated by subtracting the pension assets from the actuarial accrued liability. A higher liability results in an unfunded status, while a lower liability results in a surplus. According to the OPM, the liability is a projection for current and future benefit obligations and considers contributions paid into and disbursements from FERS. Overall, the liability is based on estimated demographics for the entire federal government, including the Postal Service.
However, the Postal Service’s benefits paid represent actual demographic behavior, such as early career turnover, and not the aggregate, resulting in a surplus status for the Postal Service and an unfunded status for the federal government.
Based on this data, the Postal Service’s overfunding issue is even larger than we previously reported. Similar to what we have noted in other OIG retiree benefit reports, Postal Service ratepayers continue to pay more than their fair share of retiree benefits. It is important that the trend of overpayments does not continue. The Postal Service faces a challenging future and its responsibilities and the true cost of funding postal operations needs to be absolutely clear. To address that challenge, the Postal Service is making operational changes to bring costs in line with revenue projections. Additionally, it is pursuing legislative changes to address concerns raised about pension and retiree health benefit payments. We believe management should also consider the FERS overfunding issue as the Postal Service pursues legislative changes.
The OIG also mentioned the “shell game” aspect to the way USPS retirement funding is handled, which we’ve pointed out in the past:
Having retirement expenses commingled with the federal government’s budget, while being expected to operate as an efficient business, puts the Postal Service in a precarious position. The surplus in the CSRDF effectively subsidizes appropriated tax dollars when it could be used to offset the Postal Service’s current and future business expenses.
Here is the OIG’s conclusion:
The Postal Service has opportunities to use at least $5.5 billion of the $6.8 billion in FERS surplus funds to address its current and future financial condition. We found the Postal Service continues to overfund its retirement obligations and there is no present legislation to resolve surpluses. Further, it is vital that the Postal Service’s responsibilities be clearly delineated and separated from those of the rest of the federal government. The overcharges associated with CSRS obligations, coupled with the FERS surplus discussed in this report, have adversely affected the Postal Service’s financial position, hindered its ability to operate efficiently in a business-like matter, and hindered its transformation under the Postal Accountability and Enhancement Act (PAEA). Action is needed to prevent a repeat of historical trends in the overfunding of Postal Service retiree benefits.
Here’s a surprising exchange you may have missed from last week’s exigency rate hearings before the Postal Regulatory Commission. It doesn’t seem to have received much attention, except for the “This Week in Postal” podcast. Tuesday’s hearing featured US Postal Service Chief Financial Officer Joe Corbett. During opening remarks, Commissioner Dan Blair mentioned the letter the PRC had received the previous day from Senator Susan Collins, co-author of the Postal Accountability and Enhancement Act that governs postal service operations. Blair said “As one of the primary authors of PAEA, her views should prove helpful as the Commission makes this determination.”
Towards the end of the session, Blair returned to the Collins letter, telling Corbett that she had said that the USPS’s “current financial condition is largely the result of its own failure to sufficiently update its business model to adapt to predictable and natural cyclical changes in the economy and mail usage.” Blair also cited statements by former PRC Chairman George Almos that were mentioned in Collins’ letter, suggesting that any exigency rate requests needed to be “truly extraordinary”.
Blair then asked Corbett to respond to the Collins letter- Corbett seemed reluctant, and when Blair pressed, Corbett suggested that the Collins letter wasn’t “worth going down”, and instead restated his opinion that the USPS “run very well, better than most commercial companies that I’ve been associated with”. Then, referring to Collins, the co-author of the bill that governs the USPS, and the ranking member on the Senate committee charged with overseeing it, Corbett said “How someone outside the organization who spends a couple hours a month on this would have any clue I have no idea. But nonetheless, that’s just difference of opinion on that.”
Here’s the text of the exchange from the official transcript (p.116):
“COMMISSIONER BLAIR: Do you have any comments that you’d wish to make to Senator Collins’s letter, or moreover would you like to identify any extraordinary costs that have been imposed upon the Postal Service during the period of time in which you claim the exigency has existed?
THE WITNESS: I won’t comment on the failure of the Postal Service. I think I would be too defensive in even bothering to comment on that. So unless you are asking me to I won’t. I think it’s –
COMMISSIONER BLAIR: Well, it’s filed with us, and I wanted to give you an opportunity to –
THE WITNESS: Yeah, I don’t think it’s worth going down. I have talked to you about my own perceptions having been here 18 months and having spent 25 years in the commercial sector and my view of how the organization is run, and I think it’s run very well, better than most commercial companies that I’ve been associated with, and with as I said before, not to be beating a dead horse, with the DNA of constant improvement. How someone outside the organization who spends a couple hours a month on this would have any clue I have no idea. But nonetheless, that’s just difference of opinion on that.”
How well is USPS doing to meet its service delivery commitments — internally and with its customers? With the new Service Delivery Calculator (SDC), the Postal Service will soon have more accurate and timely answers to this critical question.
SDC is a tool USPS and its customers soon will use to more accurately document service commitments, standards and actual delivery dates for all domestic mail classes.
The SDC replaced several older systems and combines everything they did in a single source of information. Another SDC advantage is its ability to provide real-time data, giving USPS flexibility to quickly make immediate changes in delivery commitments — updating, for example, Express Mail delivery commitments when a natural disaster strikes. The tool also lets ACE users view and print the Express Mail service directory.
DPMG and COO Pat Donahoe says SDC will be in full operation by the end of August. He advises area and district offices to prepare by making sure retail acceptance records are up to date and changes in commitments or cut off times are accurate.
“Providing this real-time data will give the most accurate information to our customers and can eliminate service failure situations that lead to postage refunds,” said Donahoe. “Overall, it’s a single corporate data source that improves efficiency.”
The Newspaper Association of America has told that the Postal Regulatory Commission that it should reject the USPS request for an exigency rate increase, saying that “the statutory requirement of ‘extraordinary or exceptional circumstances’ is not met”. The NNA suggests that the only solution to the USPS’s problems is new legislation:
Instead of raising rates, NAA believes that the Postal Service’s financial difficulties require a legislative solution. To this end, NAA is working with other mailers for appropriate legislative reforms. NAA supports the elimination of the retiree health benefits prefunding requirement, relief from the CSRS overpayment, and better aligning of facilities with needs.
But the NNA did find something it liked in the exigency rate proposal- discounts that would benefit its members! So, it suggests that the PRC approve the portion of the exigency request that would extend the volume incentive currently in effect for Saturation flats mailers (e.g. Valpak) to High-Density flats, which just happen to be the types of mailings often used by newspapers.
The USPS issued the following DMM Advisory today:
Today, the Postal Service filed a request with the Postal Regulatory Commission (PRC) to transfer commercial Standard Mail Fulfillment Parcels from the market-dominant product list to the competitive product list.
The strategy for Standard Mail small parcels redesign is included in the exigent price case that we filed with the PRC on July 6. The redesign breaks this category of mail into two significant and distinct customer segments; marketing parcels and fulfillment parcels.
If the reclassification we are seeking with today’s filing is approved, fulfillment parcels would become a lightweight category of Parcel Select.
The move would give the USPS additional flexibility in pricing this class of mail, since it would no longer fall under the CPI cap that applies to “market-dominant” products. In its filing with the PRC, the USPS explained its rationale for the change:
To summarize what appears in the attached Statement of Supporting Justification, the current structure of the Postal Service’s parcel products is misaligned with the reality of the parcel shipping marketplace. The Postal Service currently classifies parcels weighing under pound as market dominant products and parcels weighing one pound and over as competitive products. In contrast, outside of the Postal Service, parcel shipping is a seamless marketplace. The Postal Service’s competitors make no significant distinctions in their parcel offerings based on weight. Commercial services that inform shippers of the various parcel shipping options available from the Postal Service and its competitors make no such distinctions either.
Therefore, the proposed transfer will recognize commercial Standard Mail Fulfillment Parcels for what they are in the parcel shipping marketplace – a competitive product. Further, the proposed transfer will allow the Postal Service to provide comprehensive shipping solutions to its customers, including through contracts that cover all parcels regardless of weight. As described in the Statement of Supporting Justification, the proposed transfer fulfills all of the criteria set forth in 39 C.F.R. § 3020.32.
The Envelope Manufacturers Association has submitted the following letter to the Postal regulatory Commission concerning the postal service’s request for an “exigent”" rate increase:
August 12, 2010
The purpose of this letter is to offer our comments on the above-mentioned request that is now before the Postal Regulatory Commission. The Envelope Manufacturers Association rarely comments on rate or regulatory matters, however, we in this case, that we should provide our point of view.
Background
The Envelope Manufacturers Association was established in 1933 from two associations that were established in 1909. Since 1915, we have worked closely with the United States Postal Service. We believe that for the most part, what has been good for the United States Postal Service was also good for our industry. EMA and its sister organization, Global Envelope Alliance (GEA), have envelope companies in 38 nations and we count 11 posts in our current global membership. We regularly provide global postal assessments and a number of Commissioners have spoken at our conferences worldwide. We have great respect for the work of the Postal Regulatory Commission and know that the decision you now have before you represents more than a normal rate increase; it represents an important precedent for the future.
We were very engaged in much of the work that went into the Postal Accountability and Enforcement Act of 2006. Starting in 2002, we provided a host of studies to Congress and the Postal Service on various aspects of the need to reform the Postal Service. While we chose not to engage ourselves in rate and regulatory reform as we strongly supported the work of the mailing industry that pushed for price cap regulation, the same caps we must live under today.
Basis of Our Concerns
When Congress, with input from many of us, created a rate-ceiling mechanism that would allow prices for non-competitive products to be adjusted upward within the strict limit of the Consumer Price Index (CPI), we believed this to be a critical aspect of establishing a rate-making system that was more predictable and regular. Our understanding of the inflation-based cap was not only to restrict the United States Postal Service to these increases to provide a valuable incentive for it to improve its business model and its effectiveness, but also to give it an opportunity to generate and bank gains for future periods as well to avoid extraordinary cost increases. The Postal Service, as we understand it, has the authority under the law to raise rates every year, not to exceed the CPI cap. It chose not to do so in 2010 but it had the authority to do so and made a management decision not to do so for the same reasons we argue against this rate case today. The economy has not recovered and increasing rates at this time will have a detrimental impact on the entire postal value chain.
Besides the impact on our business activities, we think there is an important precedent here that should not be violated. That precedent is that the Postal Service must operate under the parameters that were set up in PAEA for an important reason; to incentivize the USPS to operate in a businesslike manner. If we want to have our Postal Service here in the future, it must operate its business under these parameters. We cannot return to the previous system of ratemaking.
We know that electronic diversion has been occurring for quite some time. If you go back to 2001 in the First-Class mail data, you can see the impact of this diversion, even when the economy was doing well following the recession of 2001 and 2002. We all know that economies are cyclical and while this recession was deeper than normal recessions, we adjusted our operations accordingly. We cut staff, we cut purchases and we cut benefits.
If we allow the United States Postal Service to breach the intent that was put in place in 2006, we believe we do long-term harm to ever operating the Postal Service as a business. We believe that a recession is not an exceptional circumstance under the law as we understand it, and we should not set a precedent for future generations to have to deal with by breaching an important protection for postal customers that was designed to ensure the Postal Service would be here in the future.
Summary
The Envelope Manufacturers Association opposes the Postal Service Request for a price increase based on the exigency provisions of the law. To allow this increase might offer short-term benefit, however, would do long-term harm to the need to reshape the Postal Service into a more modern, effectively functioning enterprise. We all are well aware that there are other avenues to lower Postal Service costs, primarily the overfunding of benefits, which need to be pursued before cutting services and increasing rates.
We sincerely hope you will uphold the important protections that PAEA has created and continue to do the diligent work you do to help create a postal system that will serve future generations.
Sincerely yours,
Maynard H. Benjamin, CAE
President & CEO
WASHINGTON, Aug. 16 — Siemens Industry Inc., Arlington, Texas, won a $79,986,000 federal contract from the U.S. Postal Service’s Supplies and Services Purchasing, Merrifield, Va., for Postal Automated Redirection System software and computer hardware enhancements.
An official for the local American Postal Workers Union has been indicted in federal court in Washington on charges of bribing a government official to steer trucking business to his gas station and repair shop.In exchange for the government contracts, prosecutors said Kevin J. Basil handed the government official fast-food restaurant bags of cash, saying, "That’s your apple pie."Basil, 40, of Brandywine, was indicted last week on a single count of bribery of a public official, a charge that carries a penalty of 15 years in prison if convicted.
Full story: Postal worker union official indicted on bribery charges | Washington Examiner.
Customers at select Office Depot stores across the country now have another option for shipping services.
The Postal Service and the office supplies retailer have partnered to make USPS shipping and mailing products available at 1,083 Office Depot stores.
“We’re excited to extend some of the best shipping values in the country to Office Depot customers, at a time and place that’s convenient to them,” said Paul Vogel, president, Mailing and Shipping Services. “Small businesses, especially, will be able to compare shipping companies side by side and see for themselves that Postal Service prices are very competitive and affordable.”
Some of the services these Office Depot stores will offer include Priority Mail and Express Mail service, Delivery Confirmation and Signature Confirmation, Parcel Post, stamps and Priority Mail flat-rate boxes and envelopes.
The partnership with Office Depot is one more example of how the Postal Service is adjusting products and services to better fit the changing needs of its customers, while finding creative solutions to generate much needed revenue. Expanding access to products and services is one of the key components the Postal Service’s action plan for the future. Click here to read the plan.
Office Depot is the first national retailer to offer mailing and shipping options for consumers as an Approved Postal Provider — an initiative between the Postal Service and business partners to offer USPS products or services at vendors’ locations.
via USPS News Link
