Good morning, Chairman Collins and members of the Senate Governmental Affairs Committee.

 My name is Dale Holton. I am President of the 103, 000-member National Rural Letter Carriers’ Association. This is my first opportunity to testify before the Senate and I am looking forward to it. Rural Carriers drive 3 million miles daily on nearly 70,000 routes, delivering mail to 32.8 million rural and suburban families and businesses. For our customers we are a “post office on wheels,” offering all the services the counter of a post office provides. We sell stamps & money orders, accept express & priority mail, signature and/or delivery confirmation, registered & certified mail and, of course, accept our customer’s parcels.

We, once again, thank the President for creating the Commission on the Future of the Postal Service. We are grateful to the men and women who served on the commission and applaud their report. We think they did a very good job in a very short window of time. No less an expert than the executive director of the previous presidential commission warned the White House of the perils of limiting the Commission’s work to only 6 months--- instead of 1 year ---to complete their business.

Given their deadline, we believe their intents were laudable. However, their governance recommendations are puzzling; their collective bargaining recommendations are problematic; and their pension & health benefit recommendations are perilous.

The proposed new regulator is assigned a study of pay comparability.

Pay comparability is a management-labor issue, not a regulatory issue.

No other regulatory agency in Washington conducts wage comparability studies of workers in industries it regulates, not the FAA, FCC, FTC, or FDIC, et.al.

If USPS goes into a downward revenue spiral, we’re certain that through collective bargaining and ultimately, interest arbitration, the case can be made before an arbitrator by the Postal Service, to hold the line on wages or provide for increased productivity. After all this is what happened to us in our last round of negotiations.

The system of collective bargaining Congress designed 30 years ago continues to work well today. Congress decided as a matter of public policy that a disruption of the nation’s commerce because of a mail strike was not good public policy and created a system of binding arbitration for postal collective bargaining impasses. This Commission proposes changes in the law that would remove flexibility. Now the parties may optionally employ most of these proposals. Each set of negotiations is unique and needs the options circumstances require. We believe that a system in which options are available works best.

In binding arbitration there is no guarantee either side will prevail. The NRLCA-USPS 2000 contract negotiations went to binding arbitration. We jointly agreed to utilize a single individual as mediator, fact finder, and arbitrator throughout the process; you could say we utilized med-arb. We opted for it. The parties agreed to it.

I would like to explain the rural carrier compensation system. Rural letter carriers are paid on an evaluated system. Annually the mileage for each route is determined by actually driving the route. The number of deliveries is counted. Finally, each year there is a period during which every piece of mail is actually counted, the period is subject to collective bargaining. Each type of mail has a time value. The multiplication of mileage, deliveries, and mail count results in an hours per week total—the route’s evaluation. This is the basis of that carrier’s compensation.

Arbitrator John Calhoun Wells awarded the Postal Service an increase in the work pace of rural carrier’s casing mail. The Wells award decreased the time value for casing letters and flats during the annual mail count. The award decreased the pay of the average rural carrier 3.1 hours per week. Each hour is worth $1500 a year. Carriers lost $4600 a year on average. This resulted in ½ hour a day more work for the same pay. Arbitrator Wells did grant a pay raise of $2600, but it did not compensate for the $4600 loss. Senators, you do the math to see who won that arbitration.

The point is binding arbitration does not guarantee your side will be a winner!

The savings to the Postal Service, by their own figures was approximately 12 million less paid hours annually due to this arbitration award. The award’s savings to USPS for rural carrier compensation is $324,000,000 annually.

The letter-sorting standard was increased 12.5%. The standard for sorting flats and magazines was increased by 25%. The speed for strapping out or “bundling” the mail to prepare for delivery was increased by 16.7%. These productivity increases helped reduce the carrier’s weekly paid time over 3.1 hours per route on average. Rural carriers were unsuccessful in increasing their time for a parcel. We continue to deliver parcels to the door, up to a half-mile from our line of travel, wait for the customer to open the door, and return to the line of travel for a total time allowance of 30 seconds per parcel. It should be noted that our walking standard continues to be 4 miles per hour, 33% faster than that of UPS delivery employees.

During those arbitration proceedings, it took NRLCA-USPS six months to schedule twenty-one (21) days of the arbitrator’s time. The expedited timetables proposed by the Commission are laudable, but unattainable. The most impossible proposal is to schedule 3 independent arbitrators and wrap it up in 60 days. Again it took us 6 months to get 21 days out of 1 arbitrator. We can’t imagine scheduling 3 in a 60-day window, unless you count days when only the 3 actually meet.

The proposals to change the collective bargaining procedures and timetables are problematic.

Today the Postal Service has no responsibility to manage a retirement or health benefit program for its employees. The Office of Personnel Management (OPM) performs that task quite capably. The Commission Report recommends very cautious consideration of a separate Postal retirement and health benefit programs subject to collective bargaining. They cautioned of unintended consequences. One of every three civilian federal employees is a postal worker. We believe pulling one third of the participants out of the current retirement system and health benefit program could have a negative impact on the existing FERS and FEHB Programs. NRLCA believes this could also present a very serious management problem for USPS. Although there are just 720,000 full time employees at the Postal Service, annually the USPS issues over 1 million W-2s. First, the Postal Service would need to create a trust fund for retirement contributions, and NRLCA would demand joint trusteeship over investments. Second, they would need investment experts to manage the trust fund. They would have to begin record keeping for current, retired, part-time and former employees. The path is fraught with perils. 

The Federal Employees Health Benefits Program is frequently pointed to as a model. Separating postal workers from the rest of the federal workforce for health insurance coverage would jeopardize its stability. Again, the postal service does not currently have experts on staff to deal with health insurance companies, health maintenance organizations (HMOs), preferred provider organizations (PPOs) or prescription benefit managers (PBMs).

Today, the NRLCA health plan negotiates with our insurance underwriter of 40 years, the Mutual of Omaha Insurance Company, and we then negotiate with the Office of Personnel Management. For example, the Rural Carrier Health Benefit Plan could decide next year to pay 100% of an annual mammogram, as our workforce is 55% female. Mutual of Omaha’s actuaries would estimate how many enrollees will utilize this benefit. Mutual will estimate the amount of premium dollars to reserve for this increased benefit. We negotiate how that fits in with allocation of all other premium dollars. OPM would then need to ask NRLCA how it proposes to pay for that benefit. Is NRLCA going to raise premiums, raise co-pay, or lower an existing benefit?

Finally, the percentage of the postal service’s contribution to each employee’s health benefit premium is subject to collective bargaining.

Any changes to the current status of retirement and health benefits are perilous to the existing programs, the postal service and the employees and retirees.

I believe it was the first PMG in Poor Richard’s Almanac who said, “Take time in all things, haste makes waste!”

In their haste, the Commission made recommendations that are puzzling, problematic, and perilous.

Chairman Collins and Senators, Thank you for your interest in this important issue. We look forward to continuing our public and private dialogue with you and members of the committee. I would ask that my full remarks be entered into the record and I would be pleased to answer any questions you may have.

                                                         BIOGRAPHICAL SKETCH

                                                                            OF

                                                    DALE A. HOLTON, PRESIDENT

                                 NATIONAL RURAL LETTER CARRIERS' ASSOCIATION

         Dale A. Holton, of Loranger, Louisiana, was elected President of the National Rural Letter Carriers' Association at the 99th National Convention in Chicago, Illinois, in August 2003.

         Dale began his postal career in 1976 as a 73 substitute, and became a regular carrier in 1985; serving on Route 1 in Loranger.  During this time, Dale served the NRLCA and its members in Louisiana in many ways.  Beginning as a Local/Area Steward, Dale also served as State President, State Vice President, State Secretary-Treasurer, District President, as a member and Co-Chair of the New Orleans and Louisiana DJSC, and as State Steward.  Dale served as State Steward from 1993, until his election as the NRLCA's National Vice President in August 1998.

         Nationally, Dale served on the Resolutions Committee at the 86th National Convention in Little Rock, Arkansas, the 87th National Convention in St. Paul, Minnesota, and as the Chairman of the 91st National Convention in New Orleans, Louisiana.  Dale also served as a member of the Southern AJSC, participated in the DPS Study conducted in 1993, and was an original member of Steward Task Force I, which was responsible for developing the standardized steward training, which is still being used today.    He was elected National Vice President at the 94th National Convention in Denver, Colorado, in August 1998.  He served five years as Vice President prior to his election to the Office of President.

         Dale's education consists of a BS Degree in Biology Education, and a Master's Degree in Administration and Supervision, which he obtained from Southeastern Louisiana University.  For 8 1/2 years, Dale taught Biology, Physical Science, and Life Science.  Dale also coached football, basketball, and track at several different schools, including his Alma Mater, Loranger High, before becoming a rural carrier.

         Dale, along with his wife, Leanne, and their two children, Mitch and Amy, are members of the New Sharon Baptist Church where Dale served as a deacon and the minister of music.  Since moving to Virginia, Dale and Leanne have become active members of the Lighthouse Baptist Church, where Leanne plays the piano, and Dale sings in the choir.

August 2003