Chapter 1 Our Mission
Regarding service, the Postal Service has addressed three important requirements in the law. First, it evaluated existing service standards in the context of current network capabilities and established modern service standards for mailing services, which were published in the Federal Register on December 19, 2007. Second, a proposal for the establishment and implementation of objective measurement systems was provided to the PRC in June 2008. Third, also in June 2008, the Postal Service submitted its Network Plan to Congress, including the vision for rationalizing the network to improve efficiency and meet the new service standards.
Separate accounting is required for mailing services and shipping services. A new Competitive Products Fund, apart from the existing Postal Service Fund, is established at the U.S. Department of Treasury. An assumed income tax will apply to profits from the Competitive Products Fund, with tax proceeds transferred to the Postal Service Fund to help defray costs for meeting the universal service obligation. In December 2007, the Department of Treasury issued recommendations to the PRC on the accounting process. Also in December, the Federal Trade Commission (FTC) reported on the application of federal and state laws to shipping services and how they differ between the Postal Service and private companies. The FTC concluded that the Postal Service’s “unique legal status likely provides it with a net competitive disadvantage versus private carriers.”
The PRC established a modern ratemaking process in November 2007 and conducted a review of the Postal Service filing on prices and services in 2008. The Postal Service implemented new prices in May 2008 for the first time under the new ratemaking process.
The law also requires the PRC to report to Congress and the President on the universal service obligation (USO) and monopoly status of the Postal Service. As part of this process, the Postal Service launched a number of initiatives in 2008 to research and analyze aspects of the USO and monopoly and understand the potential ramifications of any changes. While other carriers might offer delivery on a universal basis, the Postal Service has a universal service obligation, which encompasses multiple dimensions: geographic scope, range of products, access to services and facilities, delivery frequency, affordable and uniform pricing, service quality, and security of the mail. The PRC also held a public inquiry to solicit comments from a variety of stakeholders. Most comments supported preserving the USO as well as the two components of the monopoly (the Private Express Statutes and the mailbox access rule) to ensure funding for the USO.
On October 15, 2008, the Postal Service issued its report to the PRC, putting forth the position that the USO and monopoly are inextricably linked, should be preserved, and that additional flexibility will be needed to maintain affordable universal service, especially during a tightening financial environment.
Another key aspect of the law entails funding for Postal Service retirement and health benefits. Each year over the next decade, the Postal Service must pay between $5.4 billion and $5.8 billion into the new Postal Service Retiree Health Benefits Fund. Without this pre-payment requirement, the Postal Service’s operating net income would have been $2.8 billion.
Board of Governors
As the governing body of the Postal Service, the 11-member Board of Governors has responsibilities comparable to the board of directors of a publicly-held corporation. The Board includes nine Governors appointed by the President of the United States with the advice and consent of the Senate. The other two members are the Postmaster General and the Deputy Postmaster General. The Governors appoint the Postmaster General, who serves at the pleasure of the Board, without a specific term of office. The Governors, together with the Postmaster General, appoint the Deputy Postmaster General. The Chairman and Vice Chairman are elected at the first meeting of each calendar year. The Board directs and establishes policies, basic objectives, and long-range goals for the Postal Service in accordance with title 39 of the United States Code. Except for those powers specifically vested in the Governors, the Board may delegate the authority vested in it by statute to the Postmaster General under such terms, conditions, and limitations, including the power of re-delegation, as it deems desirable.
The Postal Service fiscal year 2008 began on October 1, 2007, and ended September 30, 2008. The full Board held meetings each month except in October, February, June and August. Meetings usually consist of open and closed sessions in accordance with the provisions of the Government in the Sunshine Act. Altogether, the full Board met on 15 days. Meetings were held in Washington, D.C., and by teleconference. In addition to full Board meetings, committee meetings were held throughout the year, some not coincident to the full Board meeting dates. The Board had five committees: Audit and Finance, Compensation and Management Resources, Governance and Strategic Planning, Government Relations and Regulatory, and Ad-Hoc Operations. The committees met to consider matters within their areas of responsibility and referred items to the full Board for consideration.
In November 2007, the Board approved the audited 2007 financial statements and the Governors approved using the new regulations issued by the Postal Regulatory Commission on October 29, 2007, for any future price adjustments.