Saturday, May 23, 2009

This is still crazy! Post Office Caps the amount they will pay for a home

I still find the fact that the Postal Service buys employees homes, when the military does not absolutely unfair! Especially considering that they have spent upwards of $2 million on a single home before! The government could buy 10 homes in Florida for that!

CNN) -- The U.S. Postal Service will reduce the amount it pays for homes of
employees who are relocating in the wake of a CNN investigation that found it
was buying large homes for more than $1 million.

The Postal Service
bought this 8,400-square-foot South Carolina home so an employee could
relocate.

The new policy, which is expected to take effect June 14, will
set a limit of $800,000 for a home. The limit is now $1 million, but before
February there was no maximum.
In a statement to CNN, Postal Service
spokesman Gerald J. McKiernan said, "It became apparent at the height of the
real estate bubble that a number of relocations involved high value homes,
thereby moving the Postal Service to reevaluate and change its policy."
A CNN
investigation revealed in February that the Postal Service had no limit on the
amount it would pay for a home of a relocating employee. It paid more than $1
million for 14 homes in the past five years.
That included $1.2 million for
an 8,400-square-foot, six bedroom lakefront home in Lake Wateree, South
Carolina.
The South Carolina home belonged to Ronald Hopson, the former
postmaster in Lexington, South Carolina, and his wife, Evelyn. The property
includes 5 acres, four bathrooms, two half-baths and an indoor swimming pool. Watch more on the house that $1.2 million bought »
The
CNN investigation prompted Sen. Chuck Grassley to request a review of the relocation
policy by the USPS inspector general's office. That review, completed this
month, found that "while Postal Service relocations are generally comparable to
other federal and private sector companies, the benefits it provides to
relocating employees are very costly to the Postal Service."
The inspector
general's report found that the Postal Service spent $73 million for relocation
benefits to more than 2,000 employees last year.
"In our view, some of the
relocations that occurred during this time period were exorbitant," the report
states.
For example, the report cites a home in Indian River Shores, Florida,
that was purchased by the Postal Service for $2.8 million in November 2007. The
home was sold eight months later for $1.1 million, a $1.7 million
loss.
Grassley criticized the amount paid for relocations.
"My reaction is
that it's outrageous, particularly if you look at specific instances within that
report, but overall surely it goes against what the Postal Service has recently
been mandated to do, operate within their income, operate in a more
businesslike, cost-effective way," Grassley said.
The report said that
"underlying the high cost of relocating employees is the fact that the Postal Service does not limit the loss it will take on an
employee's home sale."
McKiernan said the Postal Service relocation policy
"is to enable highly qualified employees to relocate as quickly as possible to
where they may provide the best use of their skills in support of the
organization's goals."
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He said in the
statement to CNN that the Postal Service has purchased 2,646 homes in the past
five years as part of the relocation assistance program. All have been
resold.
The report found that Hopson received more than $75,000 in relocation
benefits, including $16,075 for a house-hunting trip.
"We spoke directly with
the relocating employee who told us that he and his wife indeed had traveled
back and forth to Texas from South Carolina on house-hunting trips," the report
states. "Consequently, this relocation appears to have been made in accordance
with the policies and procedures in effect at the time of the
relocation."
The report revealed that the home is now under contract for
$950,000, which would mean the Postal Service would lose $250,000 if the sale
goes through.
"He wanted to voluntarily move," Grassley said. "Nobody was
making him move. They bought his house. They lost $250,000 on his house. So I
think it gets to a point where they ought to make more efficient use of their
personnel, and they wouldn't be wasting this $73 million."
Hopson, who is now
the customer service manager for the USPS branch in Carrollton, Texas, has
declined to discuss the sale, referring questions to the USPS media
office.

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