Board OKs FY99 Financial Plan for USPS
Richard Porras, chief financial officer and senior vice president, told the board at its September monthly meeting in Washington that plans are in place to commit money for 25 major processing and distribution facilities, 317 small facility projects and 4,500 new delivery and collection vehicles.
"The operating and capital plans build value through service investments that improve customer satisfaction and offer affordable rates," Porras said. "They also provide for investments in new technologies that improve our infrastructure and allow us to meet the needs of our customers into the 21st century."
Porras also said the FY99 operating plan reflects the implementation of new postal rates in January and total revenue for the USPS is estimated to grow 4.9 percent, driven by growth in First-Class, Priority and Standard-A mail.
The $4.4. billion is part of the USPS' five-year, $17 billion strategic plan, which was implemented in FY 1998 and runs through 2002. Plans call for $3.5 billion to be allocated in 2000 and $2.7 billion each in 2001 and 2002. By the end of this fiscal year, which ends Sept. 30, the USPS estimates it will have committed $3.7 billion to the strategic plan, though its original plan called for $5.6 billion.
"We're on target so far in terms of the strategic plan, even though some of the major capital programs, such as the tray management systems, have slowed down because of performance issues this year," said Bill Taymen, manager of budget and financial analysis at the USPS. "But the performance problems have been solved, so some of the commitments that were planned for 1998 have been pushed forward for 1999. Because of this, we are really comfortable that 4.4 [billion dollars] is a pretty solid estimate."
The board also approved money for several FY98 programs:
* Identification Code Sort, which will enable the 9,000 bar code sorting machines nationwide to check the florescent bar codes on the backs of letters to sort and track in real time. These bar codes identify the type of mail being sent, the machine that is handling the mail and the date and time the mail is processed. The program has been tested since 1994 on 1,000 delivery bar code sorters in northern Virginia and is expected to begin national rollout in November 1999. This is the program postmaster general William J. Henderson spoke of in his keynote address at last month's Fall National Postal Forum.
* Commitment Management-Integrated Operations Management, which will provide the infrastructure necessary to use ICS data for other diagnostic information. Postal officials said this will result in operational and service benefits and development is expected to begin this fall. A pilot operation will be launched in 2000.
In addition, money for 614 new delivery bar code sorters -- to replace old Martin Marietta sorters -- was approved, along with money to complete the installation of 83 new tray handling systems.