August 2011


Time for Action: Protest to be held at Issa's office

August 30, 2011

PRESS RELEASE:

The San Diego and Imperial Counties Labor Council (CLC) has unanimously voted to picket Congressman Darrel Issa's main district office in Vista, California (just north of San Diego) on Thursday, Sept 1.  

NALC President Fredric Rolando has decided to make this a much larger action, and he has sent out a statewide E-Activist.  The NALC will be joining several other unions and the San Diego-Imperial Counties Labor Council to personally protest Issa’s failure to represent working families and his continuing attacks to destroy the United States Postal Service. 

Since taking over as Chair of the House Oversight Committee, one of Congressman Issa’s main objectives has been to try to reduce the pay, benefits, and collective bargaining rights of postal employees.  His legislation is designed to eliminate thousands of middle-class positions from the current Postal Service workforce and to close thousands of community Post Offices across the nation.  

The Postal Service Means Business

August 28, 2011

"History Repeats Itself: The Robber Barons of the Middle Ages and the Robber Barons of Today"

“The Postal Service has been faced with critical financial problems 
in recent years.”  In the last fiscal year, “Postal Service expenses exceeded revenues” by billions of dollars.  “Although postage rates have increased significantly, labor and fuel costs have risen even faster. . .   Rising payroll costs have been primarily responsible for this situation.”

 “Because of such serious 
financial problems and the need to economize wherever possible,” the General Accounting Office (GAO) has conducted a review “to reassess the pros 
and cons of closing small post offices.”  The Postal Service has also said “that it would be helpful if the [Postal Reorganization] act were amended to specifically authorize the Service to close small offices if the alternative mail service would be at least as good.”

Sound familiar?  It should.  It’s about all we’ve been hearing for the past few months, and it’s become the mantra of the Postmaster General, the USPS managers trying to explain to communities why their post office is going to close, and legislators looking to make it easier to close post offices.

The thing is, all those quotations are not from today’s news.  They come from a GAO report prepared by the Comptroller General in the year 1975

The urgent push to close post offices to prevent the Postal Service from going bankrupt is nothing new.  The Postal Service is simply using the latest deficit “crisis” — an accounting problem caused primarily by the over-funding of retirement benefits and a slump in commercial mail caused by the recession — to do something some people have wanted to do for decades.

The 1975 report is called “$100 Million Could Be Saved Annually In Postal Operations In Rural America Without Affecting The Quality Of Service.”  The opening sentence reads: “The Postal Service has been faced with critical financial problems 
in recent years. In fiscal year 1974, expenses exceeded revenues by about $2.3 billion.”  The report’s recommendation?  Close 12,000 small rural post offices and save $100 million.

The parallels between the 1975 report and our current situation are even more striking if you figure for inflation and convert those 1975 numbers to 2011 dollars.  The 1974 deficit of $2.3 billion would come to $9.7 billion in today’s dollars — over a billion dollars more than the $8.5 billion the Postal Service lost in fiscal year 2010.  Yet somehow the Postal Service survived without closing all those post offices.

Similarly, in both 1975 and 2011, the estimated savings that would have come from closing thousands of post offices is minute.  In 1975, closing 12,000 post offices would have saved $100 million — less than 4% of the deficit.  In 2011, closing the 3,652 post offices of the Postal Service’s Retail Access Optimization initiative might save $200 million — 2.3% of the 2010 deficit.

There are still more parallels.  In June 1975, when the report came out, the country was just coming out of a recession that had been caused by the quadrupling of oil prices by OPEC (hence the refernce to the rise in fuel prices as one cause of the Postal Service deficit) and by the 1973-74 stock market crash.  The recession had caused a dramatic drop in mail volume, and there were concerns that the volume might never return.  

There were also fears, as the GAO said in a second report in 1976, that "electronic funds transfer is increasing in usage and the use of computer terminals for direct exchange of information is on the upswing," both of which "might affect demand for traditional postal services."  How many times over the past year have we heard the same thing said about online bill paying and email causing a permanent "electronic divergence" from the mail?

One last parallel: The 1975 GAO report suggests that one way to "remedy" the loss of a post office for a community would be to set up a "contractor-operated community post office" (CPO) or a "rural branch . . . operated under contract by persons who are not postal employees."  Maybe this is where Postmaster General Donahoe got the concept for replacing thousands of rural post offices with contractor-operated "Village Post Offices" (VPO).

So why is history repeating itself this way?  Why is the Postal Service still trying to close post offices? 

Kendleton, Texas

August 24, 2011

Kendleton, Texas, is rich with history, going back to the 1860s, when William E. Kendell divided his property into small farms and sold the lots to former slaves.  It got a post office in 1884, and now the Postal Service wants to take it away.  More on this story, on the way.

In the meantime, here are a couple more photos and an article from the chron.com.

 

 

South Texas post office closures 'heart breaking' for many

Patrons hoping authorities don't deliver on threat
Published 05:30 a.m., Tuesday, July 26, 2011

 

Kendleton Mayor Darryl Humphrey was stunned to learn Tuesday that his town's small brick post office is among 3,700 targeted for possible closure nationwide.

After all, this Fort Bend County town's first post office opened 127 years ago, not long after former slaves founded the community. Over the decades the office has grown into a local fixture where residents congregate to post notices and collect mail since they have no home delivery.

But now its fate looks dim as one of 219 post offices in Texas on the closure list, the most of any state. And at least 12 of the locations are from the Houston area.

"The closest other post office is 10 miles away," said Humphrey, whose town has 600 residents. "Some of our seniors can't afford the $4 gas to go that far. A lot don't have cars and have to walk to the Kendleton office."

The U.S. Postal Service announced Tuesday that it is considering shutting down thousands of post offices to cut costs and adapt to customers who prefer using the Web, smart phones or a favorite shopping destination for mail service.

If all the proposed cuts are made, it would mean an 11 percent reduction in the country's nearly 32,000 post offices.

"We will be studying the proposed closures on this list for about the next 130 days," said Earl Artis, southwest Postal Service spokesman. "It's a process, to see if it makes sense to close them."

But Artis stressed that it would be a business decision, not one based on maintaining a community's identity.

The Postal Service maintains that it cannot sustain itself without making bold changes as it's losing $23 million daily. How many jobs would be eliminated has not been determined, Artis said, as some workers will be transferred to other offices.

Officials will consider, among other factors, the impact each closure would have on its community and the potential economic savings for the Postal Service.

Dionne Montague, spokeswoman for the Postal Service in Houston, said the targeted offices had minimal workloads and were within a 10-mile radius of another postal facility.

Residents served by the post offices have 60 days to file comments with their postal branch on the closing.

Humphrey noted that his town is still reeling after being stripped of its schools when the Texas Education Agency merged the low-performing Kendleton district with Lamar Consolidated ISD two years ago.

He feels like his community will be erased from society if the post office is removed, too.

Customers at the Denver Harbor and Martin Luther King post offices in Houston were also disheartened to learn that their facilities could end up being shuttered.

Tears filled 52-year-old Mary Wicker's eyes as she spoke about visiting the Denver Harbor post office in south Houston since she was 12 years old.

"Do I need to get out there with a sign and protest?" she wondered. "My heart is broken now. This is in my neighborhood. It's one of the oldest communities in Houston."

Wicker anticipated dealing with more traffic and longer lines if she is forced to go elsewhere. She also worries about the future of postal employees whom she is accustomed to seeing there.

Herman Jefferson, 55, is concerned for the elderly served by the Martin Luther King location in southeast Houston.

"It would be a disaster," Jefferson said of closing the post office, noting that "a lot of these people don't have transportation."

The Martin Luther King location stays busy, said Jefferson, who makes a trip to the office two or three times a week. He uses the post office because he lacks confidence in his mail carrier, who he says often delivers the mail to the wrong house.

Still others think something must be done to put the Postal Service on sound financial footing.

Brazoria County Judge Joe King said he was not surprised to see the list included the tiny office in the unincorporated area of Danciger.

"For years, when I drove by, I wondered how many people it served," King said. "There's nothing there — just this tiny house about the size of my office, sitting in the yard of another house. There's nothing else out there."

cindy.horswell@chron.com

megan.ryan@chron.com

 

First-Class Mail Gets Slower: The Declining USPS Service Standards

August 26, 2011

by DON CHENEY

When Airmail was abolished in 1977, the Postal Service promised America, "All First-Class mail is going to fly." When Third-Class mail was changed to Single-Piece Standard in 1996 and then abolished as a separate category, USPS said it would "all go First Class." Now First-Class Mail is going to have yet another day added to its service standard?

When I was hired by the Post Office Department in 1966, trains hauled mail. First-Class Mail was delivered overnight between Seattle, Portland and Spokane. After the trains were replaced by trucks, it took two days. Now, it will be THREE days? First-Class Mail is becoming like Standard Mail. People will be forced to pay for Priority Mail or Express Mail if they want one or two day delivery. This is really a price increase, and the USPS didn’t have to go to the Postal Regulatory Commission to get it approved.

United Parcel Service, founded in Seattle, delivers its cheapest ground parcels from Seattle to most locations in Oregon and Washington over night.  I've often wondered how they do it.  (See the UPS transit-time map above.)

Special treatment for daily and weekly newspapers has existed since Ben Franklin was Postmaster General. This year, without fanfare, daily and weekly periodicals had their preferential handling abolished.

This will hurt the survival of most newspapers since "news" is obviously time sensitive.

Mail forwarding has been greatly centralized.  The Seattle post office does the mail forwarding for most post offices in Oregon, Washington and Idaho.  According to a USPS spokesperson in Oregon, "forwarded mail can take as many as 20 business days to catch up with its recipient." This is progress? People's mail, like bills and checks, is important. Their payments are likely to be late when they move.

When the National Postal Museum, part of the Smithsonian Institution, opened in 1993, I knew the U.S. Postal Service's days were numbered. They make museums for DEAD things.

Check out the the report by the USPS OIG "Cost of Service Standards" for more information about what's going on and what's at stake.  (The pdf is here.)

Don Cheney is a retired postal worker and former Bulk Mail Technician, living in Auburn WA. 

Post Office Closings: List and Map

August 25, 2011

The Postal Service can be very withholding about information.  It doesn’t like to give out any more than necessary, and sometimes it gives out less than required by law.  The AWPU has filed a suit against the USPS for withholding information about postal facility consolidations.  The lack of information is particularly problematic when it comes to lists.

The list for the Retail Access Optimization Initiative on the USPS website, for example, contains all the post offices being studied for closure, but it provides only the office name and the city (usually the same), plus the state and 5 digit zip code.  It’s very difficult identifying and locating post offices without a full address and a 9-digit zip — information the Postal Service obviously possesses but chooses not to share.

The Advisory Opinion being conducted by the PRC provides another example.  The Postal Service was asked to provide the data on which its Nearest Neighbor graph was based.   The Postal Service provided a list that that shows the post office names and “proximity category,” but no street addresses or anything one would need to examine the data (the pdf is here).

You would think a list of all the post offices that have been closed over the past year would be easy to come by, but no such luck.  The Postal Service website provides very little information on the subject.  With a little work using the Postmaster Finder, one can generate a list of post offices that have closed as of May 2011, but it does not include stations and branches, and it hasn’t been updated since May.  (Correction: As of Aug. 28, it was updated, through Aug. 13.)

In an attempt to help keep track of the closings, Save the Post Office has developed a list and a map of post offices that have closed since the beginning of the year (with a few from last fall as well).  The map is here, and the list is here.

The list and map contain some 160 post offices that have closed over the past several months.  This information represents a compilation of from several sources: Postal Reporter's closing list; the USPS postmaster finder; the USPS Postal Bulletin; the PRC docket list for appeals; and Iowa Backroads.  

The list is not complete and it probably has some errors.  If you notice a missing post office or a mistake, please let us know.   We’ll keep the list and map updated as post offices continue to close.  It’s not going to be a pleasant task.

King can’t get no respect: The USPS stonewalls to run out the consolidation clock

August 24, 2011

If you’ve had a chance to read Craig O'Donnell’s “They’re Coming for Your Post Office,” the story of his efforts to save his post office in Still Pond, Maryland, you know how frustrating it can be trying to get documents from the Postal Service when you’re fighting a closure.  The Postal Service is supposed to share the documents because citizens need to see what the discontinuance study has revealed, what evidence has been gathered, and how the closing rationale may be flawed.

Even the American Postal Workers Union can have trouble getting documents out of the Postal Service, and the APWU has just filed an unfair labor practice charge with the National Labor Relations Board protesting the Postal Service's failure to provide information about Area Mail Processing feasibility studies.

It’s one thing for the Postal Service to diss an average citizen or the union by stonewalling on the documents, but you would expect elected officials to get a little more respect.  Ask Iowa Congressman Steve King about that.

King’s office spent three frustrating weeks trying to get documents from the Postal Service about its plans to consolidate the large area mail processing (AMP) facility in Sioux City to Sioux Falls, South Dakota.  King, along with Iowa’s senators, Chuck Grassley and Tom Harkin, met with Postmaster General Donahoe in early August to discuss the Postal Service’s failure to respond to concerns the lawmakers and the community had expressed about the Sioux City decision, and the PMG promised they’d have the documents as soon as possible. 

King’s chief-of-staff Bentley Graves exchanged numerous emails with USPS government relations representatives and made several phone calls as well.  He was consistently told the documents would be available soon, but nothing materialized.  One USPS rep just gave up and told Graves to talk her boss, the vice president of Government Relations, but the VP didn’t return his phone calls. 

The Postal Service finally turned over the documents a few days ago, but heavily redacted, with key information blacked out.  The complete document will be shared, the Postal Service says, only during a closed meeting with community and business leaders next week.  King and others wanted the complete data so they could prepare for the meeting, but they’ll have to attend without it. 

King now accuses the Postmaster General of reneging on his promise to hand over the documents (the word “promise” is repeated eight times in the five-paragraph press release), and he says the Postal Service is stonewalling and trying to “run out the clock” between now and October 1, the deadline for completing the move to Sioux Falls.

PMG caves, DMA wins, USA loses: The Postal Service withdraws its request for a rate increase

August 23, 2011

The mailing industry has won the battle over the “exigent rate increase.”  The Postal Service will be withdrawing its request to the Postal Regulatory Commission to increase postage. 

No one likes it when rates go up, but this announcement should make people mad as hell.  The Postal Service is closing thousands of post offices, preparing to put hundreds of thousands out of work, and consolidating 500 large processing plants into 200.  In the process, it is prepared to ruin the lives of millions of people — workers, their families, people living in cities where those big facilities are crucial, and folks in small towns and neighborhoods where a post office actually means something. 

But when it comes to increasing revenues with a rate increase, well, no, the Postal Service can’t do that.  It might cut into the profits of the mail industry, and we wouldn’t want to make those big companies upset, would we?  The only group who seems happy with the Postal Service right now is the Direct Marketing Association (DMA), which has applauded the proposed cuts to the workforce and post offices.

The decision not to raise rates may also please some regular postal customers, but they won’t be pleased for long.  Not when their local post office closes, the lines at the post office five or ten miles away get longer, and delivery time on the mail slows down.  Yes, the Postal Service is planning on adding another day to delivery times in order to help keep costs down — another decision designed to please those in the mail industry, since they’d prefer if it took another day for their advertisements to get to your house, so long as their costs stay down.  The industry might not care, but did anyone ask the rest of the country how they feel about first class going from one-to-three days to two-to-four? 

The managers at L’Enfant Plaza have decided to take the “service” out of “Postal Service” by embarking on a strategy that even some inside the industry worry will become a death-spiral, with decreasing service leading to fewer customers and less revenue, and declining revenues leading to the necessity for further cuts.  As Post & Parcel reports, “fears are that efforts to reign in the processing infrastructure to match the lower volumes could prove a ‘self-fulfilling prophecy,’ with reduced service levels prompting further mail volume reductions.”

Eventually the decline in service will wake up the American people, but by then it will be too late.  The infrastructure of the Postal Service will have been so drastically dismantled it will be impossible to rebuild it, no matter how angry people are.

Another reason people should be mad as hell about the Postmaster’s decision to withdraw the exigent rate increase is the whole decision-making process has taken place in the privacy of meeting rooms at USPS headquarters.  It’s backroom politics at its worst.  All that was missing was the cigar smoke.

How to Save the Postal Service Before It’s Too Late

August 22, 2011

[in “The Perfect Storm: How Everything Is Coming Together to Take the Postal Service Apart,” a postmaster analyzed the causes of the current crisis.  In the following piece, he o makes some concrete suggestions for getting the Postal Service out of the morass.  Here is part two of "Notes from a Postmaster."  At my request, the author remains anonymous to avoid problems with management. —SH]

The United States Postal Service is in dire straits.  It is suffering from billions of dollars of losses over recent years, the promise of falling mail volumes, and an increasingly threatened business model.  The response from Congress, postal management, and many in the mailing industry has been to call for cutting the size of the workforce to a Draconian degree, pulling employee benefits out of federal programs, relaxing the universal service standard, and closing thousands of post offices

The dominant narrative consistently presented in the media is one of a mailing company with a failed business model.  To survive, we’re told, the Postal Service must cut and reduce.  However, the premise that supports this narrative is false at its core, and it essentially misreads and misunderstands the current issues.

Congress owns the Postal Service — and it owns the problems

The current deficits attributed to the Postal Service arise not from falling revenues, overly generous employee compensation, or too much capacity, but rather from accounting transfers to the Treasury mandated by Congress.  The plain and simple fact is that Congress, essentially the owner of the postal system, has extracted billions of dollars of profits and value from the Postal Service.  The bottom line is that the Postal Service is not only doing fine — its surpluses are being taken by Congress and used to mask other budget deficits.

The supposed deficits the Postal Service has been running are attributable to three related accounting issues: (1) the overly ambitious pre-funding schedule of retiree health benefits mandated by Congress in the 2006 Postal Accountability and Enhancement Act (PAEA), (2) the over-funding of both the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS), and (3) the methods used to determine potential liabilities due to workmen’s compensation.

All of the deficits of the last five years can be attributed to these accounting issues, rather than, as the Postal Service would have us believe, the recession and “electronic divergence” to email and the internet.  That is not to say that there won’t be deficits in the future, but these will be completely attributable to the panicked and ill-considered response of postal management to the deficit problem, a response that has seriously undermined public confidence in the system.

Crystal Lake, Iowa 50432

October 31, 2010

Elementary school children from Woden/Crystal Lake Community School coming to trick or treat at the Crystal Lake Post Office in October 2010.  Crystal Lake Post Office is under review for closure.

 

Rosemont, West Virginia 26424

August 20, 2011

This is a picture taken on Sunday August 14th at the Rosemont West Virginia post office 26424, we made 600 post cards from this picture and gave them out saturday August 20th, for people to mail to the postmaster general, president, our 2 senators, and congressman.

Two can play that game: The PRC changes the rules for appeals

August 20, 2011

Changing the rules in the middle of the game?  Looks like two can play that game.

In July, the Postal Service changed the rules for closing post offices.  Some of the changes were responses to criticisms made by the Postal Regulatory Commission (PRC) about how the Postal Service was making it difficult for patrons to protest a post office closing.  The Postal Service has promised to make the process more transparent and to ensure that communities are given sufficient notification and opportunity to comment.  But the main thrust of the Postal Service’s procedural changes was to “streamline” the process to make it easier and faster to close post offices.

In response, the PRC is proposing to make some changes of its own, so that it will be easier and faster to appeal a closing decision to the PRC.  The changes may not save many post offices, but they could certainly make life more difficult for the Postal Service — and expensive too.  Those legal bills are going to start adding up.

The issue of appeals has been intensifying over the past few months as their sheer number has increased at a dizzying rate.  The PRC website has a list of 63 appeals cases that have been filed since Dec. 23, 1997.  During the ten-year period 1997 to 2007, there were only six appeals, and in no year was there more than one. 

Then in 2010, there were eleven appeals — that’s when the Postal Service began its “Station and Branches Optimization” initiative to close over 700 post offices.  But things really started picking up in January 2011, and over the past eight months, 43 appeals have been filed with the PRC, 31 of them since July.

Definitive numbers are hard to come by, but the website Postal Reporter has been tracking  the closings, and it looks like there have been about 150 closings since the beginning of the year.  That means about one in four is appealing.  At that rate, if the Postal Service closes 4,000 post offices over the next year, the PRC will be handling a thousand appeals. 

It’s likely that there will be plenty of cases that justify an appeal.  With thousands of post offices closing, it may be difficult for the Postal Service managers not to make the kind of procedural mistakes that provide grounds for an appeal.  Even in the relatively few closings of the past year, the Postal Service has been accused of doing an inadequate job in making its case for closures.

For example, the community of Chillicothe, Iowa, is appealing the closure of its post office on the grounds that the Postal Service “failed to consider whether or not it will continue to provide a maximum degree of effective and regular postal services to the community,” and it  also “failed to consider the effect of the closing on the community” — considerations that are required by law.  The community of East Camden, Arkansas, is appealing the closure of its post office on the grounds that “the Postal Service failed to adequately consider the economic savings resulting from the closure,” and there were also “factual errors contained in the Final Determination.”

No wonder the PRC thought it might be a good idea to streamline the appeals process.  The PRC may also need to think about getting its own state-of-the-art, web-based computer program to handle appeals, just to keep up with the Postal Service, which is using a Change Suspension Discontinuance Center (CSDC) program  to close post offices.

The PRC hopes to be ready with its new procedures when the RAOI post offices start filing appeals, which could come as early as late October — when the first of these post offices closes.  PRC Chairman Ruth Y. Goldway says the changes are a response to the Postal Service’s efforts to close a large number of post offices.  “These rules are being considered to provide an improved review process for the expanding number of post office closure appeals that is simpler, fairer and easier to understand,” said Goldway.

Let’s Talk: How the Postal Service Values Its Employees

August 19, 2011

The Postal Service keeps talking about how it needs to act “like a business,” and that’s why it wants to “optimize” the retail network and “optimize” the workforce by closing thousands of post offices and putting hundreds of thousands out of work.  But what kind of business would treat its customers and employees this way? 

What kind of a business would make changes that are going to seriously erode customer goodwill and the quality of service?  Cutting Saturday delivery, for example, or slowing down the delivery of the mail.   The USPS Office of Inspector General (OIG) has commissioned a study designed to support the idea that cheaper postage is better than fast delivery.  Trying to get first-class mail delivered in one-to-three days means processing plants have to run through the night and on Sundays. But the OIG’s report says “some of the Postal Service’s largest business mailers have stated they value consistency over high speed and would tolerate slightly slower service to save costs.”  So the Postal Service is going to “relax” its service standards to keep its big customers happy, and the heck with the rest of us. 

What kind of a business would treat injured and disabled employees the way the Postal Service does?  The Postal Service has a program called the “National Reassessment Program.”  Its purpose is to shed workers who are injured or disabled, and there are complaints that it does so in a heartless, aggressive way.  According to several postal workers, if you have a health problem, you’re basically just sent home without pay or pushed into disability retirement.  The unions spend a lot of time helping injured and disabled workers who’ve been tossed out on the street, many of them disabled vets.  The NRP has even provoked a class-action lawsuit on behalf of thousands of injured employees. 

What kind of a business would say it needs to cut the workforce by 220,000 employees, and then put ads online looking to hire new workers?  If you don’t believe that, go to the USPS “Careers,” website and search for jobs.  You’ll get a long list of openings that looks like this:

Save the Post Office Unleashes Its Secret Weapon

August 17, 2011

With over 200,000 jobs and 4,500 post offices on the line, there’s a war for survival going on.  The national media is still printing the USPS press releases about how much money the agency is losing and how shedding jobs and shuttering post offices is inevitable. 

“Save the Post Office,” along with the postal workers unions and the postmaster associations, has been trying to set the record straight and get some truth out there, but it’s been tough breaking through the media wall. 

“Save the Post Office” has decided it’s time to unleash its secret weapon.  We’ve been holding back, hoping it wouldn’t be necessary.  But the moment has come.

If you’re a regular citizen who wants to help the post office survive, here’s your chance to make a difference.

If you’re a worker at the post office, look over your shoulder.  If you see someone who doesn’t touch the mail, wait until the coast is clear before proceeding.

When it's all clear, click here.

My Romance

by SHERRI MADDICK

I met my husband Russell twenty-two years ago in Michigan when he was an artist in residence at Lakeside Center for the Arts, a client of my public relations business back then. He was also a professor of art at Youngstown State University, about twelve miles from the PA-Ohio state line.

He lived in a barn he had converted.   On my first visit to his town, there were several wonderful surprises awaiting me, but number one on the list was a tie — no traffic and the post office.  It looked like a small white house (still does) with an American flag outside, and its only identifying mark was the black zip code on the façade.

Right after meeting my future  husband I began writing him letters. By phone, he mentioned that Postmaster Judy was asking him who was writing to him from Chicago with such fancy handwriting. The whole little town seemed to know about my letters before I ever got there. This is the charm of a small town post office and this is what would be amiss should all these little letter gathering places be eliminated to save a few bucks.

For people who unfortunately do not use a small post office, let me explain that this is one of the small wonders of the world left on earth. It’s sort of like the barber shop in Andy Griffith’s fictional Mayberry.  Small towns have characters and character. I am not sure how many still live here in New Bedford -- perhaps 500. 

We are fortunate that our post office makes money. I find myself trying to contribute in any way that I can. I buy lots of stamps even if I have not run out and I am always mailing something.  I enjoy making hand-made cards. Sometimes my embellishments cause the envelope to be hand cancelled. Now there is a fee for hand-cancelling – there never used to be when I moved here. Yet, I do not mind. I kind of like the idea of a hand cancelled card.

What people do not think about is the romance connected to post offices and real letters in general. I think of all the people in the military who love to get notes from home and cards that are sent to wish someone a happy birthday, anniversary or to express a note that they are sorry they lost their best furry friend. E-cards are okay, but they have no mark of a human on them. There is no ink, no smell, and most important, no handwriting. It’s electronic and it will be deleted.

I confess I am unusual. I have every letter my mother, who died at only 48 years-old, wrote to me in college. I can still see the postmarks and thus I can imagine her going into the post office to mail the letter. And in the same box are all the ones from my father who thankfully is still here, but I still love reading them from time to time.

My friend Catherine and I, who I just saw this summer for the first time in more than 20 years, have written each other since our post-college years where we met. She is an art teacher in North Carolina and she has always painted. So many of her cards and letters have little sketches or doodles she drew especially for that exact card- that went through the mail and came here to my little PO Box, waiting to be looked at with love. Sorry, but you cannot get that in an email; it’s just not the same. I have a giant box filled with her every letter, which came to me through 16140.

There are enough big box stores and pharmacies dotting the globe no matter where you travel. Small town post offices are unique and make a town different from the others. It’s a place where you get a little chit chat while mailing your bills or a note to a friend. There is a personality connected to it that I do not want to see disappear across America. The Post Office is one thing the government has actually created that is fabulous.  How can these bureaucrats think a few less post offices will solve America’s financial problems? That is simply pathetic thinking.

I have a rubber stamp I use a lot. It says: The mailbox is a museum. Yes it is! It can be filled with many surprises and I think people need to appreciate the charm of small post offices more in the sense of what they represent. It’s not just a place where you send your bills to be paid. I love my daily trip to the post office. I told my husband more than once if they ever get rid of our post office I am moving since we already lost our bank and gas station.

I am off to the post now in fact, I need to pick up my mail and I have to see how Postmaster Lenny’s sweet old dog is doing. She was at the vet the other day with a thyroid problem. Of course I would never know that unless I got my mail at a small town post office.

 

The Perfect Storm: How everything is coming together to take the Postal Service apart

August 16, 2011

[The following article was written by a postmaster.  "Save the Post Office" is proud to present it as our first "guest blog post."  Although the author was perfectly willing to have his name published, it did not seem prudent, given the possibility of trouble with USPS management.  When you read it, you’ll understand why I asked the author to remain anonymous.—SH]

 

Patrick Donahoe may be the last of the Postmaster Generals.  He will certainly go down in history as one of the worst. 

The United States Postal Service isn't dying because of its fiscal deficit.  It is being systematically dismembered by a management team that lacks vision, soul, and ethic.  It is being taken down by calculating politicians looking for short-term political gain, who see advantage in pandering to the new American ethic of “beggar thy neighbor.”  And eventually, it will probably be taken apart and sold off in pieces to private corporations more interested in personal profit than public service, and that will be the end of the Postal Service.

 

Pushing things to the brink

Postmaster General Donahoe and the USPS Board of Governors have been playing the worst kind of brinksmanship.  As pushback against post office closings has intensified, the latest announcement of cutting the workforce and pulling out of federal benefit programs seems designed to throw a hand grenade into the crowd. 

Donahoe had announced months ago the board's intention to forgo the retiree health payment. This newest announcement actually only rehashes what's been out there for months, but it does so in the most inflammatory way possible.  It transparently bows to the right wing anti-unionists in Congress (ironically those most likely to have offices being shuttered in their district), while virtually marginalizing any oversight by the Postal Regulatory Commission.

Sadly, it looks like what the PMG may have accomplished is to short-circuit any meaningful conversation about the value and the future of the Postal Service. The arguments now become about how and when it gets taken down, not what it’s supposed to be and what it could become. 

By pushing employees out the door, Mr. Donahoe is only adding to the economic woes of small communities across the country.  Postal workers are paid decently, and their pension and health benefits are fully funded.  These good jobs solidify middle-class communities.  Two hundred thousand fewer jobs will have a measurable economic impact.  And if Mr. Donahoe also succeeds in undermining access to the Federal retirement and healthcare systems, he will have helped cut a gaping hole in the country's safety net.

It’s a perfect storm, and everything is coming together to take the Postal Service apart.  How in the world could we have arrived at such a moment? 

 

The Post Office Becomes The Company

After the Postal Reorganization Act of 1971, it became increasingly fashionable to think of the Postal Service as a business.  This thinking really took off in the mid-eighties, and by the mid-nineties we were “the company” and everything was redefined in corporate speak.

It was during this period that the large mailing companies began to organize and assert themselves as stakeholders.  Automation took off, the complicated rate system grew, and the tendency to see the Postal Service as “the linchpin of a trillion dollar mailing industry” became more ingrained. 

The 2006 Postal Accountability and Enhancement Act (PAEA) was another step toward the business model.  It’s PAEA that mandated pre-payment of retiree health benefits.  The goal, as conceived by Senator Collins and other drafters of PAEA, was to create incentives for efficiency within senior management.  Pre-funding was just supposed to force the Postal Service to improve its efficiency and find ways to save money. 

Now that the pre-funding requirement has put the Postal Service in a hole so big the PMG is talking about cutting a third of the workforce and closing half the post offices, the drafters of PAEA appear to have succeeded in making the Postal Service “efficient” in a way beyond anything they could possibly have imagined.

Interrogatories from American Postal Workers Union

[Advisory Opinion Document Summary]

 

[The original document is here.]

1-2. The APWU asks for details about all of the facilities being studied for closure and those that are not on the RAOI list: the hours of operation; the facility finance number and corresponding main office finance number, e.g., the finance number assigned to a station and the corresponding finance number for the main post office to which the station reports; the street address for each office; the type (post office, CPU, approved shipper, stamps on consignment, etc.) and hours of operation of each of the “five postal retail and/or alternate access sites” of each facility listed in this Library Reference; and the driving distance and driving time between each facility listed in this Library Reference and its corresponding five “postal retail and/or alternate access sites”; and the revenue and expenses.

(These two questions basically ask to see some information that is readily available on the USPS website (although it may be outdated) concerning addresses, finance numbers, etc.  But some of the other information is not available but was used in the Postal Service analysis of which post offices to study for closure — revenue, expenses, distance to other post offices.)

3. Were all of the “alternate access channels” listed in your testimony, including those that only sell postage stamps, considered as “alternate access sites” when determining if a facility qualified for discontinuance review? If not, identify which types of “alternate access sites” were considered when identifying the postal retail facilities for discontinuance review.

4. Describe the standard types of products and service available in each type of alternative access sites. Where the range of products and services vary with a type, please describe the range of variability.

5. Boldt had testified that: “given changes in many communities, it is likely that these customers already travel outside their local community to purchase other goods and services and conduct other activities of daily living.” Please provide a copy of all studies or other documentation and information you relied upon in coming to this conclusion.

NAPUS Interrogatories and Responses

[Advisory Opinion Document Summary]

The National Association of Postmasters has submitted two extensive lists of questions and requests for further information. 

 

Group 1: Questions #1 - #22

[The original document is here.]

1. NAPUS asks for a list of the 2,000 post offices that had earned workload of 2 hours or less per day, and annual revenue less than $27,500.

2. Which of these 2,800 post offices is located in a rural area (based on the census data)?

3. Which of the 2,800 were managed by an on-site Postmaster, rather than a non-Postmaster?

4. NAPUS asks about the inconsistency between Boldt’s testimony that the RAO initiative is not designed to achieve a predetermined operating cost savings, and the statement by USPS spokeswoman Cathy Yarosky that “The projected savings, if every one of the 3,653 offices were to close, is $200 million annually.” NAPUS also asks how these savings were calculated.

5. How many of the 2,800 candidate post offices have been “temporarily suspended”?

6. How many of the 2,800 have been part of the delivery unit optimization (DUO) initiative?

7. Has the USPS  transmitted reduction-in-force (RIF) notices to any of the Postmasters, or managers-in-charge of the 2,800 candidate post offices? If so, how many were distributed?

8. How many post office boxes and general deliveries are located within the 2,800 candidate post offices? How many of these boxes are provided without cost, and how many are revenue-producing? What is the total revenue attributable to the boxes located in the 2,800 candidate post offices?

9. 39 USC 101(b) requires the Postal Service to provide a “maximum degree of effective and regular postal services to rural areas, communities, and small towns where post offices are not self-sufficient? How does this definition differ from “effective and regular service,” as stated in section 231 of Handbook PO-101

10. On Table 1, which purports to show declining visits to the post office, what does the “y- axis” represent? Could you please provide a definition for “point of sale” (POS) location?

11. How does the Postal Service define “customer visit? Does it only include post office visits in which a financial postal transaction takes place?

12. How does the USPS collect customer interaction data for non-financial postal transactions, including customer inquiries and collection of accountable mail?

13. Please list the operations, transactions, services and products that Village Post Offices would be required to provide under contract to the USPS.

14. How many “non-personnel units” exist? Does the USPS calculate revenue for these units? If so, how and please provide the revenue and expense data per location?

15. With reference to the statement regarding the trend for retail revenue and USPS statements that postal customers are surging towards alternative postal retail access, please reconcile with the FY 2010 Household Diary Study, filed with the PRC on July 7, 2011, which states “Even with the continued availability of mail-related products and services through alternative modes (such as Internet orders), in-person visits to postal facilities remain stable.”

16. More on Table 1. For each of the measured years, please provide the number of POS locations surveyed, and differentiate between urban, suburban and rural/small town locations.

17. Do the 2,800 candidate post offices have less than 2 hours per day earned workload and annual revenue of $27,500 or less? Or does each of the 2,800 candidate post offices fulfill just one of the two measurements?

18. Table 3. How was the sample 748 retail locations selected that is referred to in note 1? How was the sample 481 retail locations selected that is referred to in note 2? In each of the samples, please differentiate the percentage revenue collected among post offices, stations and branches, retail annexes, and contract postal units.

19. Please refer to USPS-T1, page 11, line 8. Of the 13,494 retail facilities, how many were independent post offices, and what percentage is located in rural areas or small towns? Please explain why the USPS did not have location data for the remaining facilities?

20. Table 5. Referring to note 1 (lines 8 and 9), please explain the difference between geographic coordinate distance and driving distance?

21. Please refer to USPS-T1, page 3, footnote 3. Please provide details on how “earned workload” is calculated? Please explain how “window service activity” is measured.

22. Please refer to USPS-T-1, page 15, line 3 and 4, relating to the Small Office Variance (SOV) tool. For the 52-week period ending July 2011, please answer the following questions.

  • On what basis was 2 hours of earned workload per day determined as the threshold for identifying post offices for the discontinuance feasibility study?
  • Does the 2 hours of earned workload represent the totality of work conducted at the candidate post offices? If not, please explain.
  • Please enumerate how many of the 2,800 candidate post offices utilized window automation, through either IRT or POS?
  • For those candidate post offices that did not use IRT or POS, how were the number and value of transactions (both financial and non financial) calculated?
  • Could you explain how the following post office functions were valued through SOV and the basis of those valuations: 
Building and ground maintenance, where there was no contractor retained; Servicing free post office boxes (i.e., no residential delivery available); Delivery of packages
o Multiple scans of parcel mail; Parcel return service; Premium forwarding

 

Group 2: Questions #23 - #41

[The original document is here.]

23. You state in your testimony that the Retail Access Optimization initiative will “examine the feasibility of discontinuing operations at Post Offices, stations and branches within the retail network.” Moreover, you state: “Approximately, 3,650 candidate facilities will be examined.” Please confirm that the RAO examination has already started. When will the first examined post offices be posted for proposed closures? Please explain why the Postal Service commenced the RAO initiative prior to receiving the required advisory opinion.

24. Please explain the different contracting and regulatory authorities under which the Postal Service may enter into an agreement with a Contract Postal Unit (CPU), in contrast to a Village Post Office?

25. Regarding the VPO, please differentiate the “bidding process” for a CPU, as compared to the bidding 
process for a VPO? Please explain who would be responsible for identifying and soliciting potential 
VPO contractors, and how does this differ from identifying and soliciting potential CPU vendors? 


26. 
Please confirm that a CPU shares postal revenue, while a VPO would receives a flat-rate payment. Is there an established payment for a VPO? If so, what is the payment? If not, how is that amount determined, and who determines the payment? 


27. 
Please explain the distinctions in administration and oversight of a post office, station/branch, CPU and VPO. Please include the customer complaint process and complaint resolution process for each type of facility.

28. 
Are there any restrictions on what types of commercial enterprises may be designated a VPO? If so, please explain.

29. Will VPOs accept or distribute letter mail or parcels? If so, what training will the acceptance and distribution personnel receive, and who will train?

30. Will a VPO be required to provide space for post office boxes? If not, where would the post office boxes be located and how we they be secured?

31. At the conclusion of a VPO contract, or if a VPO contract is terminated, how will the USPS assure continuation of service to the impacted community?

32. Please refer to USPS-T-1, page 6, Table 6 and page 7, Table 2. Does the data in Table 2 apply solely to communities served by the POS locations referenced in Table 1. If not, please apply the data to the POS locations.

33.Within the communities served by the 2,800 candidate post offices, please indicate the percentage of postal customers who used alternative venues for postal transactions for the most recent five years, if available.

34. Please explain the process for filling a vacant Postmaster position, and enumerate 
the circumstances under which a Postmaster vacancy would not be filled. Please identify the post offices that are currently suspended for which there is a 
Postmaster vacancy. Is a post office considered vacant if an officer-in-charge is managing the facility? Please indicate the specific criteria and threshold for concluding that there is 
“insufficient customer demand.” Please indicate the specific criteria and threshold for concluding that there is 
available “alternative access channels.” Please indicate who determines that there exists “alternative access channels.”

35. 
Please compare the parameters of the initial feasibility study conducted pursuant to the RAO, and compare with the pre-proposal study conducted in conformance to Handbook PO-101, section 22.

36. Please confirm that only one meeting would occur on a specific candidate facility, and that meeting would cover both stages. Please indicate the duration or timeline of the “initial feasibility stage. If there is no time limit, is there a requirement for community meetings at 
particular increments (e.g., annually) for a candidate post office?

37. Please refer to Handbook PO-101, section 25 (Community Meeting) and reference the previous question. Is a separate community meeting required for each candidate post office within the initial feasibility stage and/or the post proposal stage, or would the USPS conduct joint meetings to cover multiple facilities? 


38. 
Please refer to Handbook PO-101. Please explain the distinction between the communications with customers and stakeholders that are initiated pursuant to the pre- proposal investigation, as compared to the communications that take place at the proposal stage. 


39. 
Please refer to Handbook PO-101, section 321.1 and 321.2. Please explain the distinction between the items evaluated in each of the two sections. 


40. Please refer to Handbook PO-101, section 321.2.

  • Please explain how the USPS evaluates the importance of a post office, as the sole representative of the government, to a community
  • Please explain how the USPS evaluates the importance of a post office as the focal point of the community
  • Please explain how the USPS evaluates the economic impact that the presence of a post office has on the community
  • Please explain how the USPS evaluates the social impact, including communal cohesion, that the presence of a post office has on a community
  • Please explain how the USPS evaluates the presence of a post office to vulnerable populations, such as senior citizens and mobility impaired citizens
  • Please explain how the USPS evaluates the degree to which a community utilizes broadband digital communications

41. Please refer to POIR 1, question 8. Who would make the assessment of the ability of remaining postal facilities to absorb the increased retail traffic resulting from the discontinuance of a facility?

Don't touch my junk: The bulk mail industry says hands off our profits

August 15, 2011

Nobody likes it when the Postal Service raises its postage rates, but maybe it’s time to consider a rate hike.  It won't be a popular idea, but it might be better than closing thousands of post offices and laying off over a hundred thousand workers and pushing thousands more out of their jobs.

Not that a small increase in postage would cover the cost of all those workers, but it would go a long way.  Let’s look at some numbers.

On July 25, 2011, the Postal Service asked the Postal Regulatory Commission (PRC) to let it implement an “exigent rate increase” averaging more than 4 percent across most classes of mail in order to make up for volume lost during the recession. 

An exigent rate increase, if you’re not familiar with the term, is one that goes beyond an increase that just keeps up with inflation, and the PRC can only approve such a request when it is “due to extraordinary or exceptional circumstances.” 

Last year the Postal Service asked for an exigent rate increase of about 5.6% due to the recession and revenues lost to the internet, but the PRC denied the request for complicated reasons, some having to do with the meaning of “due to" but mostly because the PRC felt that the Postal Service has systemic problems — like over funding of its benefits programs — that a rate hike won't solve.

In its new request in July, the Postal Service did not specify exactly how rates for each class of mail would change (leaving the door open that first-class mail could get hit harder than bulk).  It just asks for a rate increase that would add up to an additional $2.3 billion in revenue.  That’s considerably less than the $3.2 billion the original increase would have brought in, but it’s still a significant amount of potential revenue.

What could the Postal Service do with that $2.3 billion?  For starters, it could cancel its plans to close 4,400 post offices.  The Postal Service says closing 3,600 of those post offices would save $200 million, so figure $240 million for all 4,400.  That’s just ten percent of the revenue that would come in with the rate increase

That leaves over $2 billion.  How many jobs is that?  The Postal Service payroll is about $49 billion a year, and 120,000 workers represent about 18% of the workforce, so their wages and benefits cost about $9 billion.  The $2 billion from a rate increase could thus save over 26,000 jobs.

Now, it seems like a 4% increase in postage — less than two cents for a first-class letter — might be a reasonable alternative to closing 4,400 post offices and putting 26,000 people out of work.  

But given how postage rates always seem to go up and up, maybe it's better to hold the line and just say no.  This chart dramatizes just how steady the increases have been.  On the other hand, those increases just reflect inflation, and the real cost of mailing has actually declined.  This is another bogus chart.  US rates are among the lowest in the industrialized world.  Anyway, a rate increase is clearly debatable, and it would be an interesting conversation for the American people to have.

But that’s not what’s going to happen.  There will be a public hearing by the PRC and all sides will be heard, and there will be a serious effort to arrive at a fair decision consistent with all the relevant statutes, but much of the decision making is going to take place in the conference rooms at L'Enfant Plaza and the fancy restaurants of our nation’s capital.  And the politicians, lobbyists, and Postal Service management who are eventually going to be calling the shots are not going to be worrying about whether average Americans would prefer low postage rates or jobs and post offices.

The big guns in the room are going to be the bulk mail companies, and they have already made their position clear.  They have been fighting against the rate increase since it was initially proposed last year, and they have already come out in favor of the proposed cuts to labor and the post offices.   On August 12, within hours of hearing the USPS plan, the Direct Marketing Association— the leading association of businesses using direct marketing (junk mail) — “applauded” the proposed cuts. 

Given how powerful the junk mail industry is, you might wonder how the Postal Service could even consider raising rates.  In fact, a couple of months ago it looked like the Postal Service would be dropping its request for a rate increase — at least for the bulk mailers. 

On June 21, Postmaster General Donahoe told attendees at the National Catalog Forum in Washington June 21-22 that he wouldn’t push for an exigent rate increase for Standard Mail flats – the category affecting most catalogers.  Donahoe’s comments “earned high marks in the eyes of attendees.”   

“PMG Donahoe is a breath of fresh air,” said one attendee.  “I think the USPS has a leader who gets it,’ said another. “Now the only question is if the regulators and legislators will allow him to make the necessary changes.”

“I found PMG Donahoe to be refreshingly open and honest in his willingness to partner with his customers to operate his business in a more efficient manner,” said Chris Smith, vice president of ecommerce/catalog for Jockey International. “If he is successful in moving his agenda forward, it will not only be a win for our industry, but for all mailers, and a win for the U.S. Postal Service.” 

A win-win for the bulk-mail industry and the Postal Service, but not for postal workers and rural communities.  It’s easy to see where the PMG’s loyalties seem to lie.  It looks like he’s more interested in keeping down the cost for delivering an underwear catalog than he is in protecting post offices and the jobs of postal workers.

The Shock Doctrine: Why the Postal Service is scaring the hell out of us

August 13, 2011

Postmaster General Patrick Donahoe wants to close half the country’s post offices, cut a third of all postal jobs, and pull the Postal Service out of its federal health and retirement programs.  That’s 16,000 post offices, 220,000 jobs, and a lot of lost benefits.  He’s doing all this to save the Postal Service, but there’s good reason to fear that he’s going to destroy it.

In white papers turned over to the Washington Post earlier this week, the Postal Service states, “Today, despite unprecedented cost and staffing reductions over the past decade, the Postal Service is facing the equivalent of Chapter 11 bankruptcy. While our business remains vital to the U.S. economy, we are on the brink of insolvency.”

To save the Postal Service from disaster, the Postmaster General wants to reduce the Postal Service workforce from about 645,000 to 425,000 by cutting 100,000 positions through attrition and 120,000 through layoffs.   That will really help stimulate the economy.  Weren't we supposed to be creating jobs, not destroying them? 

And when you consider that the USPS workforce is about 38% minorities (which exceeds their representation in the workforce of the country as a whole), 39% women, 28% veterans, and 6% people with disabilities, you’ll get some idea of who will come out the losers in all this.

The Postal Service also wants to reduce employee health and retirement benefits to the level of  “the private sector comparability standard” — that’s postalspeak for “we want to give our employees the same mediocre benefits the private sector gives out when there’s no union to protect workers.”  The Postal Service wants to administer its own health care plan instead of using the Federal Employees Health Benefits program, and it wants to drop out of the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) because these programs simply cost the Postal Service too much money.

And finally, as we know too well, the Postal Service wants to close down some 4,500 post offices over the coming year, and 16,000 over the next six years, and who knows how many after that.  The way they do the math, 80% to 90% of post offices lose money because they don’t get any revenue for the mail they deliver — only the big urban post offices where the bulk mail enters the system get any credit in the revenue column.  So according to the strange thinking of postal headquarters, they may as well close all the facilities except those that bring in the big mail.  They seem to be clueless about their universal service obligation.

This dire talk of imminent insolvency and the necessity for drastic cuts is an example of what Naomi Klein calls “the Shock Doctrine.”  In her book The Shock Doctrine: The Rise of Disaster Capitalism, Klein illustrates how capitalism exploits crises to increase profits — the Bush administration outsourcing the “War on Terror” to Halliburton, the beaches of Southeast Asia auctioned off as tourist resorts after the tsunami, the public housing, hospitals and schools of New Orleans never to be re-opened after Katrina. 

In a similar fashion, the Postal Service management, acting on behalf of the corporate class, is taking advantage of the recession, which is looking more and more like a double-dipper, to shock people into thinking it’s going completely broke so that they can do things they've longed to do for decades, well before the “crisis” emerged — like close “under-performing” post offices, lay off workers, and undermine the unions. 

The existence of a true crisis demanding an extraordinary response would be more believable if the Postmaster General were consistent in what he’s been saying.  It was just a few weeks ago (on June 23) that Donahoe appeared on CNBC’s Kudlow Report and said everything was hunky-dory. 

“They’re saying you’ve got a eight and half billion dollar loss in 2010,” an over-heated Larry Kudlow boomed, “and in the next few years you’re going to lose $42 billion.  Are you going broke?” 

“No, we’re not going broke,” a calm and bemused Donahoe replied. “The Postal Service is still a vital and very important industry.  We’re going to deliver 168 billion pieces of mail, and we are part of a $900 billion industry.  What we need is Congress to address a number of requirements, like pre-funding retirement health care . . . and allowing us to move from six to five day delivery. . .  And then guess what, we’d be profitable.”

Donahoe had that right anyway.  The USPS OIG has shown that the Postal Service has actually overpaid its retirement benefits program obligation by almost $7 billion.  The only one around who doubts the truth of that fact is myth-buster Darryl Issa, who gets big campaign contributions from the Koch brothers, who founded the Cato Institute, which puts out white papers arguing for privatization of the Postal Service.

But what do we hear over and over from the Postal Service, corporate executives, and politicians out to dismantle the postal system?  The Postal Service is going broke, partly because of the recession, but mostly because of “the age of email and the internet.”  No one is using the mail anymore, they keep insisting.

Right.  That’s why the Postal Service is still bringing in $67 billion a year, and that’s why the mail industry is a trillion dollar a year business.  The internet line is just a dodge.

Rolling Out Red’s: Meet your first Village Post Office

August 12, 2011

The Postal Service is rolling out its inaugural “Village Post Office” this week, and it's the cutest little place you ever saw.  It’s called “Red’s Hop N’ Market,” and it’s located in the small town of Malone, Washington, pop. 473.

The Postal Service closed Malone’s post office on August 9, and it opened the Village Post Office (VPO) in Red’s the next day, right across the road.  Talk about a smooth transition.  And the Postal Service did an outstanding job staging the debut.  All that was missing was the ribbon-cutting ceremony. 

Red’s looks like the quintessential mom-and-pop convenience store.  Red himself isn’t around, but it’s definitely a family-run business — Cheryl Lee and family have been running the store for the past five years.  The Postal Service wasn’t taking the event lightly, and it brought out the heavy hitters for the news media — Dean Granholm, VP of USPS operations, and Lee Fritschler, a scholar at George Mason University. 

“Malone was costing us about $85,000 to $90,000 a year and was bringing in less than $20,000 a year,” Granholm told American Public Media’s Marketplace, which did a spot on the “debut.”  Putting a scaled-down version of the post office inside a store will be much cheaper to operate.

How much cheaper isn’t clear.  The old post office, which had been there since 1982, was paying $450 a month, just $5,400 a year — pretty typical for a small rural post office.  The salary for the postmaster and two part-time postmaster reliefs (PMRs) may be a cost-saving, but postal workers at other locations will have to pick up some of the slack, and there’s also a fee to be paid to Red’s.  

Plus, folks in Malone are going to have put some extra gas in the tank to drive five miles to Elma when they need to do things you can’t do at Red’s — like anything requiring weighing, rating, scanning or tracking (there's no Contract Access Retail System at Red's), plus money orders, passports, bulk mailings, change of address forms, etc.  Given how limited the Village Post Office is in the services it provides, maybe VPO should stand for "virtual post office."  But there will be nothing virtual about the extra gas folks will have to pay for — not that this cost will show up on the Postal Service’s books.  

Marketplace doesn’t provide any details about the contract with Red’s.  It’s probably similar to the way they set up a “contract postal unit” (CPU). For a small operation, the Postal Service and business arrange a firm-fixed contract, in which the business is paid a fixed annual rate in twelve monthly installments.  Marketplace says the Postal Service paid Red’s $2,000 to become the new Village Post.  That's the annual fee, and it includes retail space.  It's not much (it ought to be the monthly fee), it's locked in for two years, and it's almost impossible to get an increase out of the Postal Service.  That's one of the main reasons businesses drop their CPU contracts.

The Markpetplace report also doesn’t say anything about how Red’s was selected to be a Village Post Office.  In its responses to interrogatories for the PRC Advisory Opinion, the Postal Service said that to get a VPO started, “management in the field will solicit vendor bids, and they will award firm fixed price (flat fee) contracts establishing the terms and conditions under which each VPO will operate.” 

There’s no mention of the solicitation of vendor bids in the Marketplace piece.  Maybe the Postal Service skipped that stage of the process.  CPU contracts are supposed to be competitive, but the Postal Service can use a “noncompetitive purchase method” when it’s done business with the retailer before in other locations or when “the proposed CPU is the only supplier capable of providing or willing to provide the service needed” (Postal Employees Guide to Contract Postal Units). That may have been the case with Malone — it’s not as if there are a lot of other convenience stores in town.  But does that mean the Postal Service is going to skip competitive bidding on a couple of thousand Village Post Offices since most of them are going to be in places like Malone? 

Witness Boldt replies to Goldway's information requests

[PRC Advisory Opinion Document Summary]

On August 9, 2011, USPS witness James Boldt has replied to Goldway’s information request No. 1 (August 2, 2011).  Here are his responses:

[The original document is here.]

1. Goldway had asked for a “digital copy of all demographic, economic, and geographic data that will be used to develop profiles for evaluation of each candidate facility.”  Boldt responds that “the Postal Service does not solicit demographic data from customers that might reveal such information as their age, gender, racial or ethnic identification or income.
 The Postal Service relies primarily on questionnaire answers, customer statements provided at postal-sponsored community meetings, and written comments submitted by customers of the facility after public notice that its discontinuance is being contemplated.”

(That’s understandable—the Postal Service might not be the right agency to solicit demographic, economic, and geographic data.  But the census has already done this, and there is an abundance of information available online about the racial make-up, economic make-up, transportation habits, etc., of every community on the Postal Service’s closure list.  However, note Boltd’s next comment.)

“The Postal Service does not require discontinuance review coordinators
to access U.S. Census Bureau data that may relate to the service area of a retail facility being considered for discontinuance.  In the complete absence of any other information, Census Bureau data might provide a very general overview of residents who live within some degree of proximity to a postal retail facility.  However, that information reveals nothing that is specific to the subset of residents who routinely visit the facility, the frequency of their visits, the postal transactions they conduct, or the products and services they purchase.  Rather than make assumptions or sweeping generalizations about a retail facility's customers based on U.S. Census Bureau data reflecting income or age strata, racial make-up, or mix of residential types in the surrounding area, the Postal Service relies on actual postal retail transaction data, local management's knowledge of the customers who frequent the facility, and the comments and questionnaire responses received during the discontinuance review process.”

“That being said, it is not unheard of for a local discontinuance review coordinator to compare customer comments to U.S. Census Bureau data to validate characterizations of the surrounding community contained in those comments. Customer assertions that a retail facility mainly served ‘low-income’ or ‘senior’ citizens could be checked against U.S. Census Bureau data to see if sufficiently granular data were available help judge such characterizations.”  Boldt cites as an example an earlier docket, No. A2010-6 (pages 126-127):   “As noted on that document, available Census Bureau data are not necessarily sufficiently granular to provide information pertinent to the specific service area of the facility in question.”

Boldt’s main point is that economic or demographic profiles of nearby residents gathered from the census or other sources are not going to be reviewed under the RAO Initiative, and he notes the procedures outlined in the PO-101 Handbook do not require using census data.

Local managers are, however, expected to consult the USPS Electronic Facilities Mapping System (EFMS) to calculate proximity — measured in terms of driving distance — between the facility under study and nearby postal retail locations. Discontinuance review coordinators will review information on a case-by-case basis.

2. Goldway had asked if the revenue (as it is considered a criterion to identify candidate facilities) included revenue from business mail entered using permits issued 
at a different facility, if the revenue includes from mail delivered to or through the facility.  Boldt replies that “the analysis of retail walk-in revenue excludes these sources.

(This is probably a reference to the fact that most post offices handle mail taken in at another source, and they do not get any revenue credit for it.  Consequently, 80% to 90% of post offices look like they’re losing money.  It’s more a bookkeeping issue than a comment on how much business a particular post office does.  If they were credited with a portion of the revenue that passes through its hands, the picture would look totally different.)

3. Goldway had asked how the “economic savings to the Postal Service” as a component of a proposal to discontinue a facility would be calculated, in terms of the common one-time or annual expenses or savings included in the calculation.  And she asked for a date when an estimate on each facility would be available. 

Boldt replies that "economic savings" refers to net operating cost savings to the Postal Service that would result from discontinuance of a facility.  An attached Excel workbook is utilized to measure those savings.   (This is a little complicated, so more on this workbook later.)

Boldt says “it is anticipated that the first RAO discontinuance studies will be finalized and decisions will be made beginning in October.  At that time, the Postal Service will have the first facility-specific cost savings estimates.”

4. Goldway had asked for an estimate of “the percentage of revenue from discontinued facilities that would be captured by other facilities in close proximity, including retail over-the- counter transactions and post office box rental revenue.”  And she wanted to know the methodology that would be used to make these estimates. 

Boldt replies that the Postal Service is not going to make such estimates, and it “is not aware of any method for reliably estimating such percentages.”

(Presumably the issue here is how much money the Postal Service could lose by closing a post office if all of that facility’s revenues don’t stay within the Postal Service.  Some might be lost to competitors.  But how can the Postal Service anticipate this?  It would have had to do a study of the impact of previous closings, but if it has done this, there’s no reference to it here.)

5. Goldway had asked for more information on whether and how non-revenue customer transactions will be recognized.

Boldt responds that “data regarding non-revenue postal retail transactions are recorded via Point of Service (POS) terminals, where available.  Standard earned workload credits are assigned to each type of non-revenue transaction.  Available facility-specific non- revenue transaction data are compiled in the Small Office Variance tool and evaluated during the discontinuance review process.  For facilities where such transactions are not systematically recorded by POS, local management can submit qualitative non-revenue transaction information for consideration during the discontinuance review process.”

(Non-revenue transactions refers to people picking up their mail, having the post office hold the mail while they’re out of town, getting articles too large to deliver, general delivery, scanning delivery confirmation, etc.  Goldway wanted to know how the Postal Service was going to measure how much time postmasters and other postal workers put into this sort of activity.  It’s hard to measure, but they do have a tool called the SOV, but not all facilities systematically record the data.  In these cases, local management can submit qualitative information.)

6. Goldway asked about some definitions of facility types:  define the following facility types: FND_S and FND_B.  Finance Unit -- No Delivery/Station and Finance Unit -- No Delivery/Branch.

7. Goldway wanted to know more about the new “Change Suspension Discontinuance Center” (CSDC) program the Postal Service is using to facilitate the closing process.  She wanted to see the source data as well as get a copy of the program. 

Boldt explains what the program is: “The CSDC program is a web-based application that enables Postal Service employees to perform required discontinuance steps by following the process flow matrix in the USPS Handbook PO-101.  The process flow generates standard tasks, letters, forms, and notifications to ensure uniformity and completeness. In addition, the process flow sends approval requests via e-mail to designated management and prevents certain steps from progressing until the appropriate approvals are complete.  CSDC also should be viewed as a dynamic warehouse for data extracted from various other data systems for purposes for conducing discontinuance review.  CSDC is dynamic in the sense that facility-specific data from various systems are added as needed for the performance of specific tasks.  The technical conference should shed light on its functionality and the challenge of responding to a request for an Excel or flat file replica.”

Boldt says that the data used “to determine which facilities met the criteria for the first three RAO Initiative candidate categories (low workload Post Offices, insufficient demand stations and branches, and insufficient demand retail annexes) do not derive from CSDC.”  That data will be compiled Library References.

(In other words, the Postal Service has not turned over the program or the data.)

8. Goldway had asked how the Postal Service will estimate the effect of the initiative on the capacity of remaining facilities that are in the proximity of a discontinued facility to absorb additional retail transactions and post office box demand.   Boldt replies that “the Postal Service will assess such factors as the physical capacity, retail hours, staffing and proximity of remaining facilities, as well as alternate access sites, to make a qualitative assessment of the ability of remaining nearby postal facilities to absorb an increase in retail traffic that could result from the discontinuance of a facility.”

9. Goldway had asked for confirmation “that no candidate facilities and none of the alternative access sites were under suspension as of July 27, 2011.”  Boldt replies that “for the first three categories of facilities described . . . the candidate list was intended to reflect postal facilities in operation on that date.”  Because a post office in “emergency suspension” status has not officially closed (it’s temporary),  “it is not beyond the realm of possibility that a facility listed in one of those three categories or an alternate postal retail facility was temporarily in a suspended status on that date for some reason.”  Of the fourth category (about 260 facilities undergoing discontinuance review when the discontinuance regulations were amended in mid-July 2011, but for which the discontinuance process had not advanced to the point where a public meeting was announced), Boldt says that fewer that 20 were under emergency suspension when the docket was filed.

10. Goldway had asked for a definition of “Village Post Office” (VPO) and how it’s different from a “contact postal unit” (CPU) in terms of product or service offerings.

Boldt says, “A Village Post Office is non-postal owned and operated establishment that will, aside from its other functions, sell postage stamps and prepaid postal Flat Rate shipping boxes.  Some VPOs will have Post Office Box units installed that will be serviced by postal delivery personnel.  Consideration will be given to the feasibility of locating a collection box in close proximity to each VPO.  Some VPO operators may offer to hold mail for tender to postal personnel.”

The main difference from a CPU is that a CPU “sells a much broader range of postal products and services” (as see in an attachment).  Also, in contrast to a VPO, CPU operators accept mail on behalf of the Postal Service.  A collection box may be located on or in close proximity to the premises of a CPU.  Some CPUs also house Post Office Box units. Depending on the CPU, those box units are serviced either by the CPU operator or postal delivery personnel.

Neither VPOs and CPUs may sell postal products and services at prices above those available at a postal retail facility.

11. Goldway asked for an estimate of how many VPOs the Postal Service currently has and anticipates having operational in 6 and 12 months?  Boldt replies that the “inaugural VPO is expected to be in operation before the middle of August 2011.”  He mentioned that “ several hundred inquires from interested vendors were received within days of the concept being publicly announced in July 2011,” but, he says, “it is premature to reliably project how many VPOs will be in operation in either February or August of 2012.”

12. Goldway asked about how the Postal Service plans to initiate and finalize agreements for the creation of Village Post Offices.  Boldt says management in the field will solicit vendor bids, and they will award firm fixed price (flat fee) contracts establishing the terms and conditions under which each VPO will operate.

13. Goldway asked about the Postal Service’s plan for the use of Automated Postal Centers (APCs) in providing alternative retail access as part of the initiative.  Boldt says APC availability will remain as it is currently.  About a dozen of the approximately 2500 units are located off of postal premises, with the rest operating in postal lobbies. There is no plan to relocate APCs to VPOs.

14. Goldway asked about the chart showing “proximity to the nearest Post Office [that] is based off of geographic coordinate distance, rather than driving distance.” She asked that the Postal Service provide a data file with the actual driving distances to the nearest alternate retail location for each facility under consideration.  Boldt replies that the data are being compiled responsive to this request.

15. Goldway asked about Boldt’s earlier statement that alternative access includes nearby approved shippers and stamp consignment locations in addition to full service alternatives.  So she asked about the number of occurrences where the five nearest locations are approved shippers or stamp consignment locations (not full service alternatives);and the Postal Service’s anticipated action when none of the five nearest locations are full service.

Boltd replies that the data are being complied to respond to this request, and he add that “it bears emphasizing that the proximity of five such locations is a criterion 
used to define a particular category of facilities to consider for discontinuance review under the RAO Initiative. However, this criterion is not a controlling factor in the discontinuance review that is inevitably conducted. It is expected that there will be cases where the closest alternate retail options for a facility under discontinuance review will not be "full-service" postal or contract postal unit options. As indicated is USPS Handbook PO-101, the nature, extent, proximity and accessibility of postal retail and alternate access is considered on a case-by-case basis as part of the discontinuance review process.”

The Smartest Guys in the Room

August 10, 2011

It looks like there are some guys over in L’Enfant Plaza having a goof making graphs and charts to show why they need to close thousands of post offices.  If the stakes weren’t so high and the damage to communities so great, it might be amusing watching these pranksters at work.  

These are "the smartest guys in the room," and their graphs and database tables use silly tricks that manipulate the data to make the plight of the post office seem way worse than it is and to make the alternatives seem better than they are.  They're like the Enron nerds who made millions shutting down the California power grid, sitting in front of their computer screens, detached from the reality of the pain they were causing.  (If you haven't seen the movie, here's the trailer.)

These tables come from the testimony Postal headquarters presented to the Postal Regulatory Commission.  They were also used in briefing materials that have been circulating in DC for a few weeks.

Table 1 is a chart that shows “annual customer visits” to the post office.  Given that we’ve been in a recession and the Postal Service has been encouraging people to use alternative access outlets, it should come as no surprise that these visits are on the decline.  Here’s the table:

As you can see, the table makes it look like the slope of the decline is precipitous, and in a couple more years, no one will be going to the post office at all.  (It's not clear what that y-axis is measuring, and in its interrogatories to the Postal Service, NAPUS asks for an explanation, but you get the idea—visits are declining.)  In the presentation materials, this graph is made to look even worse:

Congressional resistance to the closing plan grows

August 9, 2011

Congress is getting into the act of resisting the Postal Service's plan to close thousands of post offices. 

The Hill reports that Oregon's Democratic delegation to Congress has called on Postmaster General Donahoe to ensure small towns still have reasonable access to post offices.  In a letter dated Aug. 8, 2011, Sens. Jeff Merkley and Ron Wyden and Reps. Earl Blumenauer, Peter DeFazio and Kurt Schrader said the USPS cuts may be too aggressive and could leave towns without viable alternatives.

Two other congressmen are circulating a letter they've written to Ruth Goldway, chair of the Postal Regulatory Commission, and they are asking their colleagues in Congress to sign on with them.  Representatives Gerald E. Connolly (11th District, Virginia) and Don Young (At-Large, Alaska) have expressed their concerns with the Postal Service's plan, based on the negative impact those closures could have on rural communities, seniors, small businesses, and the long term viability of the Postal Service itself.

The letter states, "We appreciate the dire fiscal condition of the Postal Service and the need to change the Postal Service's business model to protect its viability and the service it provides to American consumers or businesses.  Unfortunately, widespread post office closures is the wrong way to deal with the Postal Service's fiscal problems, and could harm the Postal Service's competitiveness in the long run."

You can read the entire letter here.

UPDATE: A a bipartisan delegation of lawmakers in Virginia and West Virginia is seeking an examination into the proposed postal closures as well as current spending practices of the U.S. Post Office.  The examination is being jointly sought by U.S. Sen. Joe Manchin, D-W.Va., U.S. Sen. Jay Rockefeller, D-W.Va., U.S. Rep. Nick Rahall, D-W.Va., U.S. Rep. Shelley Moore Capito, R-W.Va., and U.S. Rep. David McKinley, R-W.Va.

More on that story here.

PRC Docket No. N2011-1 and the Future of the Post Office

August 8, 2011

On July 27, 2011, the US Postal Service submitted a request to the Postal Regulatory Commission for an Advisory Opinion about its Retail Access Optimization Initiative (RAOI), and the PRC opened Docket No. N2011-1, which will contain all of the testimony and related documents for the case. 

N2011-1 is likely to go down in history as one of the most important dockets ever to be considered by the PRC.  The outcome of this process may determine the fate of the brick-and-mortar post office in America.

Here’s where we are as of August 8, 2011.

The Postal Service has requested an Advisory Opinion, and its first witness, James J. Boldt, has presented testimony elaborating on the plan.  The chairman of the PRC, Ruth Y. Goldway, has submitted a list of materials she wants the Postal Service to provide as part of this “discovery” phase of the proceedings.  The PRC has designated Tracy Ferguson as the Public Representative, and she too has provided a list of things she wants from the Postal Service.  There’s also a Limited Participant named David Popkin, who has submitted a request for still more information.  The Postal Service has replied to some of Popkin’s requests, but not the others.  There’s also an issue of two documents that the Postal Service does not want made available to the public. 

We can now see the argument that the Postal Service is making to defend its RAO Initiative, and we can also begin to see what shape the challenge to that plan may take. 

Issues over the two documents under seal

[PRC Advisory Opinion Document Summary]

Two documents have been provided to the PRC that are "under seal," i.e., not available for public review: (1) Material Related to Postal Location “Nearest- Neighbor” Calculation and Results, and (2) Material Related to Revenue Distribution and Single Stamp Sale Analyses.

The Postal Service explains that these materials should be kept private as a matter of “good business practice.”  These documents contain “commercial information of the Postal Service, such as facility-specific walk-in-revenue at thousands of facilities throughout the country, as well as disaggregated walk-in revenue for selected locations.”  Were this information to become public, “the Postal Service considers it quite likely that it would suffer harm. Revealing Postal Service facility-specific walk-in-revenue as well as disaggregated walk-in revenue would enable competing companies to use the information to assess market potential for establishment of competing mail and parcel stores. The Postal Service considers it highly probable that, if this information were made public, local competitors would take advantage of it.”

The Postal Service provides a “hypothetical”: “Facility-specific financial information or disaggregated walk-in revenue concerning a particular location is revealed to the public. A nearby private commercial mail receiving agency reviews the information, and determines that a discontinuance will affect enough potential customers at the postal location to justify an advertising campaign targeted at existing Postal Service customers. The private company directs advertising for its mailbox and shipping services to existing Postal Service customers, thereby causing the Postal Service to lose business to the competitor.”

Limited Participant Popkin has filed a motion (July 28, 2011) to have this material made public.  With respect to the Nearest Neighbor file, he says, “By not providing an explanation of what Nearest Neighbor Calculations show or why they should be nonpublic, I am not able to evaluate the Postal Service’s request nor can I believe that the Commission can.”

With respect to the revenue calculations file, he says, the Postal Service should be required to provide the revenue bracket that each of the facilities lie in so that participants will be able to evaluate the accuracy of the listing of facilities subject to evaluation.

In response to Popkin’s motion, the Postal Service says (Aug. 4, 2011) reiterates what it said in its initial filing, namely that public disclosure of a revenue range for the facilities on the list “would add nothing to the consideration of the issues raised in this docket, and would likely cause commercial harm to the Postal Service as the Notice describes.”

 (While it may be understandable why the Postal Service would want to keep some of this revenue information private, it seems strange to keep the data about Nearest Neighbor out of the public eye, given that it’s all easily available on the USPS post office locator and Google maps.  In fact, on my website, you can easily see how far other facilities are from any given post office.)

Interrogatories of the Limited Participant and USPS Responses

[PRC Advisory Opinion Document Summary]

David Popkin participated in the 2009-10 Advisory Opinion on Stations and Branches, and he is participating again in a capacity called “Limited Participant.” On July 28, 2011, he submitted his own interrogatories, in two documents, and the Postal Service has already replied to his inquiries, so in the following summary, I’ll provide Popkin’s question/request and the USPS reply.

These interrogatories come in groups, numbered as follows.

First group: #1 - #15 

[The original is here, and the USPS reponses are here.]

1-2. Popkin asks for a list of the scenarios under which a customer who receives mail delivery at a facility that is closed will or will not be able to continue to use his existing address.  The Postal Service replies that “one change in the nature of postal services that customers may
experience pertains to Post Office Box service. The Postal Service expects that
no existing box customers would be disenfranchised, but some may experience
address changes in box number or ZIP Code.”  In other words, in some cases, when a p.o. box is moved to another post office, it might be necessary to change your box number (it could already be taken) and/or your ZIP code.  In some cases, p.o. boxes might be relocated in a cluster box or a  would happen when p.o. boxes are moved to another post office and a “leased non-personnel Post Office Box unit.”  The Postal Service adds, “Reasonable alternatives will be explored in order to minimize the need for address changes for recipients whose mail is delivered to a Post Office box unit that is discontinued.”

3. Popkin then asks if the Postal Service will take into account the effect on customers who will be required to change their address as a result of the discontinuance or consolidation of a facility? The Postal Service answers yes, it will.

4. Popkin asks for a list of the actions a customer who is unable to maintain their existing address as a result of the discontinuance or consolidation of a facility might need to take.  The Postal Service replies that customers who suffer a change in address will need to “inform correspondents of their new delivery address and a date on which the change is expected to take effect.”

5 – 8. Popkin asks about the various “alternate access sites” that the Postal Service says are legitimate substitutes for a post office: Contract Postal Units, Approved Shippers, Stamp Consignment Locations, etc. Popkin asks what services are available an independent post office, station, or branch that are not available 
at these alternatives, as well as those available at an these alternates that may not be available at a post office.  In response, the Postal Service provided a chart, which you can see here.  

9 - 10. Popkin asks about how the nearest neighbor data was developed.  How werethe two mile and half mile distances for alternate access sites determined, including whether criteria such as major highways, bodies of water, bridges or tunnels, etc. are considered?  And he asks for confirmation that the distance is the distance between the facility being considered and the location of the alternate access site.

The Postal Service replies that this distance “was chosen because it represents a reasonable distance for assessing whether there were five or more alternate access sites in close proximity to a station or branch to warrant whether discontinuance of that facility should be considered as part of the RAO Initiative. The "5 within 2.5" was deemed to be a reasonable basis for determining how broadly the RAO "net" should be cast over stations and branches. The "5 within 2.5" threshold is not the only reasonable combination of variables that could have been chosen. Some other combination might have increased or decreased the number of stations and branches in the candidate pool. One of the Postal Service's goals in establishing the scope of the RAO Initiative was to avoid an undertaking that might prove unwieldy to manage. It should be emphasized that the "5 within 2.5" threshold is only used purposes of identifying a category of candidates to be examined for purposes of this Initiative. The factors used to decide whether to discontinue operating a particular facility are in USPS Handbook PO-101.”

The Postal Service adds, however, that “when discontinuance review is conducted under the PO-101, driving distance is typically used to measure proximity between postal facilities and alternate access locations.”

11. Popkin asks about the rationale for establishing the revenue criteria for the second category of post offices.  What’s the rationale for using a decline in revenue (from 2010 compared to 2008 and 2009)?  Why is this criterion used only for this second category?  In response, the Postal Service says, only that “it was deemed reasonable” to do it this way, and that “it should be emphasized that the declining walk-in revenue criterion is only used to identify candidates for discontinuance review.”

Popkin also asks, What percentage of facilities in the entire country have a FY 2010 revenue that is less than the average of the FY 2008 and FY 2009 revenues? The answer: Approximately 71 percent.

And to put this in perspective, Popkin asks, What is the total revenue for the Postal Service for FY 2008, FY 2009, and FY 2010? According to the USPS FY 2010 Annual Report, rounded total revenues 
were as follows: $74.968 billion (FY 2008), $68.116 billion (FY 2009) and $67.077 billion (FY 2010).

(The implication of Popkin’s questions here is that declining revenues at a particular post office is fairly meaningless as a criterion for closure, given that the entire Postal Service is experiencing declining revenues, and 71% of facilities have declining revenues.)

12. Popkin then moves on to the threshold numbers being used to evaluate facilities with multiple units.  “In a facility that has multiple units, is the revenue amount to meet the criteria [$10,000 / $27,500 / $600,000 / $1,000,000] for inclusion on the list of facilities for each individual unit or is it for all units in a ZIP Code or Post Office combined?”  Please explain the rationale for all this.

The USPS replies, “For purposes of facility-specific discontinuance review, the pertinent walk- in revenues are those that can be attributed to the specific facility being studied for discontinuance. Accordingly, revenues for subordinate stations or branches are to be excluded when a Post Office is being studied. Likewise, Post Office revenues are not to be included when a subordinate station or branch is being studied.  Such an approach seems better suited to determining whether a specific facility should be considered for discontinuance review than if revenue not associated with that facility influenced the determination.”

13. Popkin asks more about this criterion.  What items are included and not included in the revenue amount used to meet the criteria [$10,000 / $27,500 / $600,000 / $1,000,000] for evaluating a specific facility, and what’s the rationale behind all this?  The Postal Service provides a chart with more information about this.  The rationale is that “Because the overwhelming majority of customers who visit postal retail locations are walk-in customers and their transactions generate significant retail workload, walk-in revenue seemed a reasonable criterion to use in identifying which retail facilities to subject to discontinuance review as part of the RAO Initiative. It bears repeating that these threshold figures are not controlling factors in the Handbook PO-101 review process that determines whether to discontinue the operation of retail facilities.”

14. Popkin now moves on to the rationale for choosing each of the criteria [the dollar amounts of revenue, the distances to and number of the alternate access sites, etc.] for inclusion on the list of facilities to be studied.  The Postal Services replies that the RAO Initiative requires the Postal Service to use its recently amended discontinuance process on an accelerated basis. “It seems prudent to ensure that the scope of the RAO Initiative is manageable while local discontinuance review personnel adjust to the new procedures while balancing their RAO Initiative duties with other day-to-day responsibilities.” 

(That response seems to imply that the Postal Service might have come up with an even larger list of post offices for discontinuance studies, but it did not want to overwhelm its personnel, who are first adapting to the new procedures.  This suggests more lists may be on the way down the road.)

15. Popkin asks about the issue of alternative sites near the post office being studied for closure.  For example in evaluating location A, assume that there are only five alternate access sites within the specified distance of location A and one of these sites is location B and evaluation of location B meets the criteria for inclusion on the list. If location B should then be discontinued or consolidated, there would only be four alternate access sites for location A.”

The Postal Service replies, “The arithmetic in your hypothetical is correct. However, the existence of five alternate access locations (including postal retail sites) within a specified proximity of a postal retail location subject to discontinuance review is only a factor in determining whether it is a candidate for discontinuance review as part of the RAO Initiative. There is no specific number of nearby alternate access sites that serves as a controlling factor in the USPS Handbook PO-101 process used to determine whether to discontinue operation of a retail facility. Such determinations will be made on a case-by-case basis under the PO-101.”

Group 2: #16 - #18

[The interrogatories are here, and the USPS responses, here.]

16. Popkin asks more about the Alternate Access Site criteria: “Given that Saturday has a lesser retail service than a weekday, has this been taken into account in determining whether alternate access sites are available on Saturday?”  And please provide “a tabulation showing the percentage of postal facilities that 
have retail window service on Saturday broken down by District, Area, and nationwide.”  The Postal Service that “Whether a specific alternate access site is available to provide service on a Saturday is site-specific and considered as part of the USPS Handbook PO-101 review process. However, it was not considered as part of the process for identifying RAO Initiative candidate facilities to subject to that review process.”  The Postal Service provides a chart with more information about this.

17. If a facility that is being studied for discontinuance or consolidation is determined to justify the discontinuance or consolidation, is it an all or nothing requirement or will it be possible to terminate only some of the functions [such as retail window service, post office box service, carrier operation, etc.] at the facility? 

USPS: The RAO Initiative is focused on determining whether to discontinue all retail operations at candidate facilities. If retail operations are the exclusive function of a facility, then discontinuance of retail operations at that location will result in all operations being discontinued at that location.

Outside of the scope of the RAO Initiative, it is possible that a determination could be made to relocate carrier operations at a facility that also provides retail service. Similarly, outside the RAO Initiative, a local determination could be made to relocate all or part of a Post Office Box section to a nearby facility.

18. Please provide the claimed financial savings, both one time and annual, that will result by the discontinuance or consolidation of each of the facilities.

USPS: Cost savings are expected to result from the RAO Initiative. However, neither the Request nor the testimony filed in support of it contains a claim or estimate of one-time or annual savings financial savings that will result from discontinuance or consolidation of any particular postal retail facility under consideration as part of the Initiative or an aggregate RAO Initiative claim or estimate.

The Request and testimony refer to a process being employed to identify facilities to consider for discontinuance, and to develop estimates on a case-by- case basis of potential operating cost savings that could result from discontinuance of facilities for which studies are completed for purposes of decision-making. Both documents also indicate that facility-specific analysis is underway, but that the first decisions will not be made until October 2011. Accordingly, the first facility-specific studies are not expected to be completed until then.

At that time, the Postal Service will have estimates of the savings expected for specific facilities for which studies have been completed and discontinuance decisions have been made. Any estimate or projection of cumulative cost savings made before the Initiative has run its course would be speculative.

Group 3: #19 - #27

[The interrogatories document is here; USPS responses, here.]

Several questions are about the “Village Post Office” and the “Alternate Access Sites”: Will there be a blue collection box at each one?  What provisions will be made for collecting mail from this box?  What changes will be made to the collection requirements provided in the Postal Operations Manual?  What kind of training will operators at Alternate Access Sites and Village Post Offices be given?  What kind of compensation are these operators receiving?  What kinds of services are available at a VPO as opposed to a regular post office?  The Limited Participant also asked about the consolidation of Business Mail Entry Units (BMEU) and future plans for further consolidation.

19. Asked about the procedure and regulatory requirements that would have to be followed by each of the different types of Alternate Access Sites in the event that they wanted to discontinue operation, Boltdt replied that “Non-postal alternate access channels operate under the terms of contracts with the Postal Service that are usually renewable. Those contracts have notice provisions in the event that the contractor should wish to terminate or not renew. The Postal Service is not aware that the willingness or commitment of a vendor to continue operating as an alternate access channel, or a decision by such a vendor to discontinue, is subject to procedures or regulations of an agency such as the Postal Regulatory Commission.”

(The issue here, I believe, is that closing a post office requires the Postal Service to follow a series of steps outlined in the law.  If a post office is replaced by an alternate access facility and either the Postal Service or the supplies wants to close the facility, there are no procedures for it in the law.  So the Postal Service could say, look, we’ve provided an alternative to the post office, but then that alternative might be short-lived and there’s no process to evaluate the closing.  It was a good question and got a snotty answer.)

20-22. In response to questions about whether there would be a blue collection box at Village Post Offices and Alternate Access Sites, and if so, how the mail would be collected, Boldt said if there were a box, collection procedures would be in accordance with existing policies.  (The question is about the security of the mail.  It’s implying that the manager of a VPO does not have the authority to collect mail from the box.)

23. The Limited Representative asked about consolidation of Business Mail Entry Units.  Boldt replied that BMEU’s were outside the scope of the RAOI, but it was reasonable to assume there would be further consolidations of these units, and if one were in a post office that closed, its responsibilities would be transferred to another unit.

24. The Limited Participant asked about the training required of a postal window clerk as opposed to that required for someone operating a Village Post Office.  Boldt replied that the training for a clerk would be more extensive, and that the level of training would vary, depending on the type of service: training for a CPU is more extensive than for a VPO, which is more extensive than stamps on consignment.

25. The Limited Participant asked for a description of the training and oaths that are required of all employees, contractors, and operators that have custody of the mail with respect to the security of the mail and sanctity of First-Class Mail.  Boldt replied that the question was irrelevant, and he would not provide any information about how people the Postal Service contracts to handle the mail are trained.

26. The Limited Participant asked about payment arrangements for the Village Post Office.  Boldt replied:

For VPOs, see the response to POIR 1, Question 12.

Contract Postal Unit operators are compensated in accordance with contracts with the Postal Service.

Approved Shippers are provided signage, but are otherwise not compensated.

A fixed rate commission is paid for management of the consignment program and maintaining relationships with consignees (retailers). Select consignment retailers are compensated by USPS for achieving specific levels of sales performance. Consignees receive signage from the Postal Service.

27. What services would and would not be available at a Village post Office?  See reply to similar question by the Public Representative.

 

Boldt Replies to Limited Participant questions 28 – 32

[The original document is here.]

28. The LR asked about a scenario in which Post Office A is discontinued or consolidated and its delivery functions [post office box and carrier delivery, if any] are transferred to Post Office B such that the customer will utilize a post office box physically located at Post Office B or be served by a delivery carrier on a route now originating at Post Office B. Further assume that the customer’s original address had a last line of “Town A, NJ 07688”.  Will it be possible for the customer to maintain their 
same address that they had before the discontinuance or consolidation of Post Office A, namely a last line of “Town A NJ 07688” and also maintain the rest of the address the same. The processing plant will be programmed to send mail addressed to Town A NJ 07688 physically to Post Office B [ZIP Code 07633] where employees of Post Office B will place this mail in the box section for the transferred customers as well as having the carriers deliver the mail on routes originating at Post Office B. If so, will the Postal Service utilize this procedure of making the change transparent to the customers of Post Office A? If not, why not?

 (a)  It will be possible in this hypothetical if the Postal Service adopts polices and procedures to make it possible in that circumstance.

(b)  In the hypothetical you pose, that will be a possibility.

(c)  N/A

29. Please confirm, or explain if you are unable to confirm, that the BRICK & MORTAR / RETAIL COUNTER column applies to all independent post offices and classified stations/branches and only to this type of facility. Please advise the types of facilities that are included in the BRICK & MORTAR / CONTRACT POSTAL CENTER column.

If all of the Alternate Access Sites are not included in the Contract Postal Center column, please provide the similar data for each of the types of Alternate Access Sites.

RESPONSE

(a)  That is the intent.

(b)  Contract Postal Units.

(c)  Approved Shippers accept mail and sell postage and packaging. 
Consignment operations sell postage stamps.

30. Please refer to your attached chart in response to Interrogatory DBP/USPS-13. Please explain why mailers who utilize a Permit Imprint and/or 
Precancelled Stamps are not counted in the revenue figure while mailers who make a similar mailing and pay the postage with a postage meter are counted. Please explain why mailers who pay for Express Mail with a corporate account are not counted in the revenue figure while mailers who make a similar mailing and pay the postage with a postage meter or over the retail counter are counted. Please explain why mailers who pay for their Post Office Box rent at an APC or at usps.com are not counted in the revenue figure while mailers who pay their rent over the retail counter are counted. Please explain why mailers who pay for their mailing at an APC are not counted in the revenue figure while mailers who pay for the same mailing over the retail counter are counted.

Boltdt’s response:

(a) Permit imprint and precancelled (P&P) stamp mailings are bulk entry transactions for which there is relatively little acceptance workload in relation to the high dollar value of the bulk mailing. Counting this mail as walk-in retail would skew the assessment of walk-in revenue per hour. Metered mail can be entered in bulk or at retail. As a matter of convention, for purposes of earned workload, metered mail is counted as walk-in revenue, despite the fact that some metered mailings may, to some degree, be "similar" to permit imprint and precancelled stamp mailings. Otherwise, making a change to count P&P transactions as retail or all metered mail as commercial would skew comparisons to historical data, productivity and revenue trends

 (b)  The same general considerations as discussed in response to subpart (a) come into play. Also, commercial postage revenue is often paid at a facility different from the one at which the mail is accepted and where work is performed.

(c)  The objective is to measure walk-in retail workload via transactions that require interaction with or activity by retail window personnel who perform work associated with the mail or service in question. Transactions conducted via an APC do not fall within that category.

(d)  See the response to subpart (c).

31. Please refer to your response to Interrogatory DBP/USPS-15. Please provide the specific section of USPS Handbook PO-101 that specifies the number of Alternate Access Sites that are to be considered in the determination of including a facility for evaluation.

Please review the following quotations from the response to DBP/USPS-15:

First:
[T]he existence of five alternate access locations (including postal retail sites) within a specified proximity of a postal retail location subject to discontinuance review is only a factor in determining whether it is a candidate for discontinuance review as part of the RAO Initiative.

Then:

That response does not imply that the PO-101 was a source of the determination to specify what number of alternate access sites needed to be within a specified proximity to a retail location for it to be a candidate for discontinuance under the RAO Initiative.

There is no specific number of nearby alternate access
sites that serves as a controlling factor in the USPS Handbook PO-101 process used to determine whether to discontinue operation of a retail facility.

32. Please refer to your attached chart in response to Interrogatory

  •  [a]  Please advise the national policy as to whether a specific facility should or should not provide retail window service on Saturdays.
  • [b]  Evaluation of the chart shows a variation of Saturday retail window service ranging between 23-percent and 99-percent. Please explain why there is such a wide disparity between the different districts.
  •  (a)  Retail window service is provided on Saturdays if there is a demonstrated need. At financial units serving business areas or facilities serving communities where residents leave on weekends, retail service may be closed if service is available at other postal units, at contract stations, or by self-service equipment.
  • (b)  Variation is to be expected when local management has the discretion described in response to subpart (a) to make assessments based on local circumstances.

 

Interrogatories from the Limited Participant (#36 – 38)

[The original document is here.]

36. Tables 1 and 2 of the Testimony show a truncated y- or vertical axis. Please provide a table with the same data except with the y- or vertical axis going all the way down to zero.

37. Are there presently any plans to add facilities to the listing of those facilities already provided for study for discontinuance or consolidation?  If so, when will the listing be provided and under what circumstances will these new facilities be added?  If not, how long is it believed that it will be before new facilities will be added?  Please define the terms discontinuance and consolidation and provide an explanation under which each of them will be utilized.

38.The Englewood NJ Post Office Annex 07631 is on the list of facilities being studied. There are at least four functions being conducted at this facility, namely: retail sales, post office boxes, carrier annex, mail dispatching to/from the P&DC. Are there any other functions being conducted at this facility? Which of the four or more functions being conducted at the facility are being studied for discontinuance or consolidation?

Interrogatories of the Public Representative and USPS Responses

[PRC Advisory Opinion Document Summary]

As par tof the "discovery" phase of the PRC proceedings, the Public Representative (PR) can ask for more information and explanations from the Postal Service.  

 

First Interrogatories, #1 - #5

[The original document is here.]

The PR refers to witness Boltd’s statement, “It should be emphasized that postal management is not pursuing the RAO Initiative in order to achieve any predetermined operating cost savings target in the postal retail network.”

The PR asks the following: Does the Postal Service expect to achieve cost savings if the RAO Initiative is implemented?  What is the estimate of the cost savings?  And please confirm that your testimony does not include an estimate of cost savings.

(This may be a reference to the fact that the Postmaster General and others are going around saying that they hope to save $200 million by closing these post offices.  If there is a particular goal like that, it would suggest that post offices are being closed in order to meet the goal, rather than on the basis of an evaluation of the post office itself.)

The PR also asks if the Postal Service currently maintains a database of all retail facilities, and if so, to provide it, with a full explanation of all the data fields, for fiscal years 2008, 2009, and 2010.  (The Postal Service is known to have such a database, and in an article a few months ago, which I can’t locate right now, there was reference to the way someone could call up the info on a computer in seconds.)

The PR then refers to another passage in Boldt’s testimony, where he states, “the Postal Service has examined earned workload data for each of its retail facilities and has identified all Post Offices for which earned workload amounted to less than two hours per day and annual revenue was no greater than $27,500. Over 2,800 candidate offices were identified using data collected from the Small Office Variance tool.” In response, the PR asks how the Postal Service determines the workload and EAS classification of each Postal Facility?

Next, the PR refers to Boldt’s statement that“retail locations with annual walk-in revenue of less than the relatively low figure of $100,000 generally tend not to be as geographically isolated as some might assume,” and he refers to Table 5, which provides data for 13,494 retail locations for which latitude and longitude data were available.  The PR askshowmany postal retail locations averaged less than $100,000 in yearly walk in revenue in FY 2008, FY2009, and FY2010, and she asked why data was not available for all of the postal locations, and what the implications of incomplete data might be in terms of calculating impacts of the RAOI.

The PR also notes that the file “FY2010 Offices under $100,000 by Technology.xls” contains location and revenue data for postal retail locations using different reporting technologies.  So the PR asks for confirmation of the accuracy of the database, wonders why some retail postal facilities have negative yearly revenue, and asks for more discussion about the different reporting technologies used to estimate walk-in revenue.

The PR continues, noting that the Postal Service has stated that “approximately 85 percent of postal retail revenue is generated from the sale of postage,” and she asks for more information about data this as well.

 

Second Interrogatories, #6 - #9

[The original document is here.]

The Public Representative proceeds to ask about the non-public files on the proximity of postal retail facilities to other postal retail facilities, the “Nearest Neighbor graph data” table.  The PR focuses, as an example, on several post offices in Arkansas that are on the closure list: Red Devil, Crooked Creek, and Steelmute.  The PR has used the post office locator on the USPS website, and found that the closest retail facilties to Red Devil are Steelmute (12.7 miles) and Crooked Creek (31.6 miles), as well as Chuathbaluk (not on the list, 37.8 miles from Red Devil).

The PR then asks if the information she has found on the USPS website is accurate, and why this information differs from what appears in the database provided by the Postal Service.  She also asks if the Nearest Neighbor pool contains post offices that may also close, how are “nearest neighbors” identified and their distances calculated, and what steps the Postal Service will pursue to ensure that accurate information is available regarding the distance to alternative access points in event of closure.  (The point here is that the Postal Service may be measuring distances in a flawed way, and they may be identifying a nearby post office as an alternative, yet that post office itself may be closed.)

The PR goes at the issue from another angle, this time focusing on the post office in Goodsprings, Alabama, on the closing list.  The Post Office locator on the USPS website says the closest postal retail facility is the Parrish AL location, which is 5.5 miles away.  The PR notes that in the Nearest Neighbor data sheet, the nearest neighbor to the Goodsprings post office is not recorded as 5.5 miles away, so she wants to know why there are these inconsistencies.

 

Boldt Replies to Public Representative, #1 – #9 (August 8, 2011)

[The original document for Responses # 1 - 3, here;   Responses #4 - 9, here.]

1. On page 13 of your testimony, you state: “It should be emphasized that postal management is not pursuing the RAO Initiative in order to achieve any predetermined operating cost savings target in the postal retail network.”

(a) Does the Postal Service expect to achieve cost savings if the RAO Initiative is 
implemented?  Yes

(b) Please confirm that your testimony does not include an estimate of cost savings 
from implementing the RAO Initiative. Confirmed.  Please see the USPS response to DBP/USPS-18

(c) Please provide an estimate of the cost savings from implementing the RAO 
initiative.  Please see the USPS response to DBP/USPS-18

d) Does the Postal Service currently maintain a database of all retail facilities? If so, please provide this database in either excel format or as a flat file for FY2008, FY2009 and FY2010. Please identify and define all data fields

Response: There are various data bases that contain some information about retail facilities. There is no one system that contains all postal data regarding all of its retail facilities. The USPS Facilities Database (FDB) is a system that contains some retail facility data and is able to access or link to a wide variety of other data about retail facilities from other data systems However, it does not exist in a form that makes it possible to create an Excel or flat file replica. It is hoped that the technical conference will shed light on what exists.

(e) Does the Postal Service currently maintain a database of all retail facilities with cost and revenue for each facility? If so, please provide this database in either excel format or as a flat file for FY2008, FY2009 and FY2010. Please identify and define all data fields.

Response: Almost. The Facilities Data Base contains or is able to access data by six-digit facility finance number. However, the data for approximately 1900 stations and branches are rolled-up to the finance number of the Post Office to which they report in FDB. Accordingly, FDB cost data for various finance numbers are an aggregate figure that covers multiple associated retail units. With that limitation, the Postal Service will file a Library Reference document responsive to this interrogatory with cost/revenue data for FYs 2008-10.

2. On page 15 of your testimony, you state: “the Postal Service has examined earned workload data for each of its retail facilities and has identified all Post Offices for which earned workload amounted to less than two hours per day and annual revenue was no greater than $27,500. Over 2,800 candidate offices were identified using data collected from the Small Office Variance tool.”

(a) How does the Postal Service determine the workload and EAS classification of each Postal Facility? 

The Postal Service assigns standardized quantitative values to various tasks performed at retail locations to determine earned workload. Nationally established standardized productivity targets are applied to the unit workload to calculate earned workhours. Based on its earned workload, a facility is classified as requiring that its Postmaster be of at least a certain postal EAS grade.

(b)  Please provide the “Small Office Variance Tool” in either excel format or as a flat file for FY 2009 and FY2010. Please identify and define all data fields.

The Customer Service Variance (CSV) model is used to review Function 4 operations, delivery unit non-carrier bargaining unit activities, in Cost Ascertainment Group (CAG) H to L offices. Cost Ascertainment Group (CAG) classifications are used to identify Post Offices according to revenue generated. CAG H-J offices have 190 to 949; CAG K offices have 36 to 189; and CAG L offices have fewer than 36. CSV integrates locally reported unit workload from various national data systems. However, it does not exist in a form that makes it possible to create an Excel or flat file replica. It is hoped that the technical conference will shed light on what exists within or is accessible via CSV.

3. On page 11 of your testimony, you state that “retail locations with annual walk-in revenue of less than the relatively low figure of $100,000 generally tend not to be as geographically isolated as some might assume. Table 5 below is based on data for 13,494 retail locations for which latitude and longitude data were available.”

a. How many postal retail locations averaged less than $100,000 in yearly walk in revenue in FY 2008, FY2009, and FY2010. Response: FY 2008: 13,432. FY 2009: 13,860. FY2010: 14,243.

b. The file “nearest neighbor graph data.xls” tab “data” contains location title data for a confidential number of postal retail locations. Was the Postal Service unable to obtain latitude and longitude data for all postal retail locations? If not, please explain why some postal locations were excluded from the “nearest neighbor” calculation.

c. Please discuss how exclusion of postal retail locations from the nearest neighbor calculation will impact the retail access optimization process.

Response to b-c:The Nearest Neighbor depiction in Table 5 is meant to present a general illustration of proximity based upon easily accessible latitude/longitude data from the Facilities Data Base. Creation of the Table did not rely on the more robust data source -- Electronic Facilities Management System. EFMS provides a means of determining driving distance between postal retail facilities and is routinely used for determining proximity of nearby postal retail facilities as part of the Handbook PO-101 discontinuance review process. Accordingly, the fact that Table 5 provides a general overview based on limited latitude/longitude data has no bearing on how inter-facility proximity is being measured or analyzed as part of the RAO Initiative.

4.

5.

6. The postal retail facility “Red Devil AK” is under consideration for closure according to cell A6 in tab “new_2hrs” in USPS-LR-2, as is “Crooked Creek AK” (cell A5), and “Sleetmute AK” (cell A14). According to the Post Office locator at http://usps.whitepages.com/post_office/AK/99656?d=40”, the closest postal retail facilities to the Red Devil AK location are as follows:

(a)  Please confirm that in cell I13442 of tab “data” in file “Nearest Neighbor graph data.xls,” the nearest neighbor to the Red Devil AK postal retail location is neither recorded as 12.7 miles, nor 31.6 miles, nor 37.8 miles.

Confirmed.

(b)  Please explain why the data for this location in USPS-LR-NP1 does not match the information available on the USPS Post Office locator.

As explained in response to PR/USPS-T1-X, Table 5 is based strictly on data reflecting latitude/longitude "as the crow flies" distances.  Postal Locator distances are driving distances between locations.

City

State

ZIP

Distance

Red Devil

AK

99656

0.0 mi

Sleetmute

AK

99668

12.7 mi

Crooked Creek

AK

99575

31.6 mi

Chuathbaluk

AK

99557

37.8 mi

 

(c) In general, does the “Nearest Neighbor” pool include postal retail facilities that, in addition to the target facility, may be closed as a result of the RAO initiative within 365 days of the determination to close the target facility?

The question is not clear. Nearest Neighbor facilities are ones for which latitude/longitude data were available in a particular data base that does not reflect the entire postal retail network or the subset of the retail network within the scope of the RAO Initiative. No analysis of the Table 5 facilities has been performed to determine any degree of correlation they may have to RAO candidate facilities, or to facilities that may be closed 365 days (or any other time period) after a facility is closed as a result of RAO.

(d)  How are “Nearest Neighbors” identified and their distance from each other calculated when there are multiple (i.e., more than two) concurrent postal retail facility closures within a particular geographic area?

Bear in mind that the Nearest Neighbor Table 5 plays no role in the execution of the RAO Initiative. Surface driving distances will be used in the RAO Initiative to determine the distance between a candidate for discontinuance and the closest nearby retail location. If RAO candidate facilities are in sufficiently close proximity that each is the "nearest neighbor" to the other, this fact will be taken into account in the review process in determining the fate of the two facilities.

(e)  Please explain the steps the Postal Service will pursue to ensure that accurate information is available regarding the distance to alternative access points in event of closure.

Electronic Facilities Management System driving distance measurements will be checked against local management knowledge, other driving distance mapping software such as Bing, or odometer tests, if necessary.

7. The postal retail facility “Goodsprings AL” is under consideration for closure according to cell A26 in tab “new_2hrs” in USPS-LR-2. According to the Post Office locator at http://usps.whitepages.com/post_office/35560, the closest postal retail facility is the Parrish AL location, which is 5.5 miles away.

Please confirm that in cellI 1636oftab“data”infile“ Nearest Neigbor graph data.xls,” the nearest neighbor to the “Goodsprings AL” postal retail locations is not recorded as 5.5 miles away.  Confirmed

Please explain why the data for this location in USPS-LR-NP1 does not match the information available on the USPS Post Office locator. Please see the response to PR/USPS-T1-6(b).

According to Google Maps, the driving distance from the Goodsprings AL location to the Parrish AL location is 7.6 miles, (http://maps.google.com/maps?saddr=824+Goodsprings+Road,+P arrish,+AL&daddr=5911+Highway+269,+Parrish,+AL+35580&hl=en &ll=33.694352,-87.261658&spn=0.212236,0.140762&sll=37.0625,- 95.677068&sspn=51.222969,31.289063&geocode=FbuUAQId9B3 N-imNkHZqS_OIiDGuiiDCy8Ixhg%3BFXzwAgIdz1nM- inlfxUlZoqIiDHSSKzOd99jwA&mra=ls&t=h&z=12) please discuss the steps the Postal Service will pursue to ensure that accurate information is available regarding the actual travel distance to alternative access points in event of closures.

Please see the response to PR/USPS-T1-6(e).

8. Please discuss how the database used to calculate USPS-LR-NP2 and table 5 on page 12 your testimony differs from the database used to calculate the distance between postal facilities at http://usps.whitepages.com.

Table 5 is based strictly on data reflecting latitude/longitude "as the crow flies" distances.

White Pages is an outside vendor that currently hosts the Post Office Locator on usps.com. It uses the Bing mapping system to create maps and driving directions. As customers use the Post Office Locator on usps.com, White Pages geo codes a customer's input address information, then utilizes geo code data for the facilities in the USPS Facilities Data Base to create the map/driving directions to each postal location.

9.Please provide the database used to calculate the distance between postal facilities at http://usps.whitepages.com.

The Bing mapping system database used to calculate driving distances for White Pages is proprietary to Microsoft. The database is the intellectual property of Microsoft and is not within the custody or control of the Postal Service.

 

Third Interrogatories, #10 - #13

[The original document is here; a summary is on the way.]

 

 

Boldt Replies to Public Representative to #11 – #12

[The original document is here.]

11. Please confirm that the calculation of walk-in revenue in USPS-LR-NP2 does not include revenue from any First Class Presort Mail, Standard Mail, or Periodicals Mail.

Confirmed.

12. Can First Class Presort Mail, Standard Mail, or Periodicals Mail be entered and paid for at any of the postal retail facilities listed in USPS-LR-NP2 file “Basket Analysis by UFN.xls” or “USPS-LR-N2011-1_NP2 Revenue Distribution for LT100K Locations - Pie Chart.xls”? If so, please explain why this revenue has not been included.

It can be entered at many, if not all of those facilities. However, see the response to DBP/USPS-30, which explains why it is not counted as retail revenue.

Presiding Officer’s Information Request No. 1

[PRC Advisory Opinion Document Summary]

On July 28, 2011, Ruth Y. Goldway designated herself to serve as Presiding Officer for the USPS Retail Access Optimization Initiative, Docket No. N2011-1, effective immediately.  Within a few days, Goldway had prepared the “Presiding Officer’s Information Request No. 1.”  It asks for a lot of material, to be provided no later than August 9, 2011. 

[The document is here.]

Here’s what Goldway has requested:

1. A copy of all demographic, economic, and geographic data that will be used to develop profiles for evaluation of each candidate facility.  (There may be an issue here: I thought I read that the Postal Service would not be using demographic data to make its decisions.)

2. Confirmation that revenue, as it is considered a criterion to identify candidate facilities, does not include revenue from business mail entered using permits issued at a different facility, and does not include revenue from mail delivered to or through the facility, including post office boxes, caller service, or street delivery.  (This may refer to the fact that calculations about a post office’s revenues include only those brought in at the facility, which does not give a full picture, since most mail is bulk mail introduced at a few large urban facilities.  Many people have pointed out the unfairness of this mode of calculation in determining the economics of a given post office.)

3. More information about how the Postal Service is calculating “economic savings.”  The USPS Handbook PO-101 Postal Service-Operated Retail Facilities Discontinuance Guide refers to “economic savings to the Postal Service” as a component of a proposal to discontinue a facility.  Goldway asks that the Postal Service to describe the calculation of “economic savings” it anticipates from closing post offices, including all the common one-time or annual expenses or savings included in the calculation.  She also asks the Postal Service to provide a date that an estimate of the economic savings, by facility, from discontinuation of the candidate facilities will be available.  (The issue of cost-savings is crucial, since it is difficult to determine how much the Postal Service actually saves in closing a post office.  It no longer has to pay rent or maintenance on an owned building, but labor costs are more difficult to evaluate.  Sometimes there are other costs to consider, like the cost on walking away from a lease with a couple of years left.)

4. An estimate of the percentage of revenue from discontinued facilities that would be captured by other facilities in close proximity, including retail over-the-counter transactions and post office box rental revenue.  If the Postal Service anticipates this percentage to vary by facility, please explain, and please explain the methodology used to estimate the overall percentage or any variance from that percentage.

5. More information on whether and how non-revenue customer transactions will be recognized.

6. The “Change Suspension Discontinuance Center” (CSDC) program mentioned in the filing, as well as the source data or database for the CSDC program, including data for all facilities that were considered in developing the list of candidate facilities.

Preservation of convenient access is an important consideration within the initiative.  The following questions seek to clarify the availability, use, and convenience of those affected postal facilities that remain open and other alternate access channels.

7. Please explain how the Postal Service will estimate the effect of the initiative on the capacity of remaining facilities that are in the proximity of a discontinued facility to absorb additional retail transactions; and to absorb additional post office box demand.

8. Please confirm that no candidate facilities and none of the alternative access sites were under suspension as of July 27, 2011.

9. More information about the “Village Post Office.” What does the term mean?  How is it different (if it is) from a CPU, particularly with respect to any difference in product or service offerings?  How many Village Post Offices deso the Postal Service currently have and anticipates having operational in 6 and 12 months?  By what methods does the Postal Service plan to initiate and finalize agreements for the creation of Village Post Offices?

10. More information about plans for the Automated Postal Centers (APCs) as a way of providing alternative retail access.

11. The data files used to calculate nearest post offices. The Postal Service has provided a chart showing “proximity to the nearest Post Office [that] is based off of geographic coordinate distance, rather than driving distance.”  In other words, the Postal Service is measuring distance “as the crow flies,” rather than actual driving miles and time.  So Goldway asks for a data file with the actual driving distances to the nearest alternate retail location for each facility under consideration.

12. Information about alternative retail outlets.  The Postal Service witness had indicated that alternative access includes nearby approved shippers and stamp consignment locations in addition to full service alternatives.  So Goldway asks for information about the number of occurrences where the five nearest locations are approved shippers or stamp consignment locations (not full service alternatives); and the Postal Service’s anticipated action when none of the five nearest locations are full service.

The PRC responds to the request for an Advisory Process

[PRC Advisory Opinion Document Summary]

Having received the Request for an Advisory Opinion and the testimony of a USPS representative, the Postal Regulatory Commission publishes something called “Notice and Order Concerning Request for an Advisory Opinion Regarding the Consideration for Closure of Approximately 3,650 Postal Retail Locations Order No. 778 (Issued July 28, 2011).”  

[The Notice and Order document is here, and the contents of the docket are available on the PRC website, here.]

The PRC's statement begins by reviewing what’s happened so far.

The Request was accompanied by testimony from one witness, James J. Boldt, the National Manager, Customer Service Operations, in the Office of Delivery and Post Office Operations at Postal Service Headquarters. Boldt’s office has primary responsibility for developing policies and procedures relating to the day-to-day operations of post offices, opening or closing of those facilities, and improving customer experience. 

Boldt’s testimony describes the current state of the Postal Service’s retail network, including alternative access channels and underlying trends.  He describes the RAO initiative as a systemwide approach to the decline in demand for retail services and the widespread availability of alternative access channels.  His testimony indicates that the Postal Service will evaluate postal offices with low workload, stations and branches with insufficient demand and available alternate access, and retail annexes with insufficient demand and available alternate access.

The Postal Service intends to make use of the new “USPS Handbook PO-101” that reflects recent rules promulgated by the Postal Service concerning the methods to close or consolidate postal retail facilities.  Finally, the testimony explains how the Postal Service’s new rules work and how they will be applied in the RAO initiative.

Timing.  The request for an advisory opinion must be filed at least 90 days in advance of the effective date of the proposed changes.  The Postal Service indicates that it started discontinuance actions consistent with the RAO initiative beginning July 26, 2011.  The Postal Service contends that these actions are not “implementation” of a service change because the initial action of public notice of discontinuance is only an “information-gathering process.”  The Postal Service states further that if discontinuation is announced, the facility must remain open for a further 60 days.  The Postal Service states that it expects notices announcing discontinuances of particular facilities to be issued starting in late October through late December of 2011. 

In other words, the process of discontinuance for these 3,500 post offices has already begun.  If notices go out in November and December, these post offices could be closed before spring. 

"Given the Postal Service’s financial position, the Commission finds it appropriate to expedite the proceeding.  To facilitate expeditious review of the matter, the Commission expects parties to make judicious use of discovery, discovery objections, and motions’ practice.  Every effort should be made to confer to resolve disputes informally."

Tracy Ferguson has been designated to serve as the Public Representative to represent the interests of the general public in this proceeding, assisted by John P. Klingenberg.  Neither the Public Representative nor any additional persons assigned to assist her shall participate in or advise as to any Commission decision in this proceeding, other than in their designated capacity.

The schedule: The process is conducted much like a legal court case, with periods for discovery, presentation of the case, cross-examination, the opposing case, more cross-examination, and so on.  The first hearing will take place on Thursday, Sept. 8, 2011, at which the Postal Service will present its direct case.  The opposing side, the “intervenor,” will have its hearing begin on Mon., Oct. 3, 2011.  Additional hearing will take place on Oct. 17 for “subrebuttals.”  For the details of the schedule, see the PRC website, here.  Presumably the PRC will try to issue its Opinion in early November.  It’s supposed to try to complete the process in 90 days, which would be late October.  It can go on as long as it wants, but the Postal Service may proceed with its closing processes after 90 days.  Of course, it can do so even after the PRC Opinion is announced, even if that Opinion objects to the plan.  The complete calendar is here.

The Testimony of James J. Boldt for the USPS

[PRC Advisory Opinion Document Summary]

The Postal Service’s case is represented to the PRC by a witness who presents the plan.  His name is James J. Boldt, and his statement begins by identifying himself as the National Manager, Customer Service Operations, in the Office of Delivery and Post Office Operations at Postal Service Headquarters. He has served in this capacity since May 2011. He previously served as the National Manager, Rural Delivery, also within the Office of Delivery and Post Office Operations at Postal Service Headquarters. As the Manager of Rural Delivery, he was in charge of policies and procedures for more than 75,000 rural routes nationally. Before that he was a mail handler and clerk, going back to 1984, and he has also served as a postmaster.

Boldt’s testimony repeats much of what is stated in the Request for an Advisory Opinion, but we’ll go over it in detail anyway.  [The original document is here.]

The Postal Retail Network Must Evolve

Boldt’s testimony explains the RAOI.  He overviews the current postal retail network of 26,700 Post Offices and 4,800 subordinate stations and branches—there are as many full-service retail facilities in the United States as Starbucks, McDonalds, Seven-Eleven, and UPS Stores combined.

The post offices are classified on the basis of “earned workload” of each facility—a combined value for the mail distribution, PO box delivery and retail window service activity at a facility.  Thus an office can have an earned workload of 2 hours per day, 3 hours per day, etc. 

Then there are the “alternate access channels”— 62,650 private retail stores that sell postage stamps on consignment; 4,300 businesses that operate as Approved Shippers and accept packages and other matter for mailing; the Postal Service’s public website -- www.usps.com -- which offers various postal products and services; rural delivery carriers who provide retail products and services; and approximately 2,500 Automated Postal Centers, virtually all of which are located in postal retail lobbies and many of which are accessible after regular retail window service hours. In addition, postal customers can arrange by mail, fax and telephone to have postage stamps and shipping supplies delivered. Where rural or Highway Contract Route delivery is provided, customers have the option of carrier pickup of letters and packages at a delivery point.

Boldt notes that “as the Post Office’s role in the postal retail network has diminished, other aspects of the postal retail network have become more important,” and he proceeds to paint the alternatives as increasingly popular with customers.  (Of course, what he does not explain is that the Postal Service has driven this shift away from the post office.  He makes it seem as if they are simply responding to a changing demand.)

In order to provide evidence of these shifts, Boldt produces a chart showing the decline in customer visits to the post office.  The graph shows a decline from 1,100 annual visits in 2007 to 927 in 2011, but the graph shows only the top portion of the line, so the angle of decline is exaggerated.

Boldt presents a second graph showing the declining share of postal revenue that comes from brick-and-mortar locations.  Again, only the top part of the graph is shown, so it looks like post offices are trailing off to zero, when in fact it shows a decline from 80% to 65% of total revenues. 

“As customers continue to embrace alternate access channels, all other things equal, it is likely that the proportion of overall postal retail revenue generated at Postal Service-operated retail units will continue to diminish in the future.”  (Of course that will happen if they keep closing post office, cutting the hours they’re open, making them further and further away.  It’s a self-fulfilling prophecy—they’re making it happen.)

Boldt says the development of the alternate network “is also consistent with the 2006 Congressional mandate to expand and market a variety of alternative retail access channels.”  This is a reference to the PAEA, and it’s going to be the crux of the debate, as predicted on this website a few weeks ago.  Did Congress intend for the USPS to expand the network to improve access to postal services, or to lead the way for replacing post offices with the alternatives?

Then Boldt presents another graph (Table 4) showing the decline in the number of post offices from 77,000 in 1900 to 27,000 in 2010, noting that closures slowed after the 1970 Postal Reorganization. 

(That represents closing 50,000 post offices over 110 years, 450 post offices a year.  Now they want to catch up for the slowed progress of the past 40 years by closing 4,500 in one year.  This graph, by the way, comes from the USPS OIG’s “Barriers to Retail Network Optimization,” a document that points to all the difficulties that are encountered when the Postal Service wants to close post offices.  This is just one example of many of how the GAO, the OIG, and the Postal Service, along with the Cato Institute and commissioned scholars, have long been working at preparing the case that is embodied in the RAOI.)

Boldt’s next chart focuses on 13,494 retail locations for which latitude and longitude data were available, 90% of which are located within ten miles of the nearest retail location, and nearly half within five miles.  (It is not clear why geographic coordinates were available for only these post offices.  The Save the Post Office website provides this data for the entire population of 4,500 post offices—just click on a post office on the map or the closing lists in the sidebar.)

Moreover, the distance is measured in miles based on geographic coordinates, not driving time.  Again, it’s not clear why they did the calculations this way, since Google maps will easily provide the actual driving time, as available on my website.  Questions will be asked about this, as discussed in Post #000.

The Scope and Objectives of the Retail Access Optimization Initiative

Boldt states that “in light of the widespread access to alternative sources for obtaining postal services, it is incumbent upon the Postal Service to review its physical retail network to determine if reasonable opportunities exist for making the network more efficient and customer access more convenient, while continuing to provide adequate access to its products and services.”

Boldt notes the “precipitous declines in mail volume” and “the severe financial duress under which the Postal Service has been operating” (no mention here of the stress caused by the pre-payment of retirement and health benefits to employees who haven’t been hired yet).  “Such circumstances exert additional pressure on postal management to pay careful attention to its responsibility to efficiently provide service that meets its obligations to the public.”

For these reasons, says Boldt, the Postal Service headquarters has initiated the RAOI. “It should be emphasized,” he says, “that postal management is not pursuing the RAO Initiative in order to achieve any predetermined operating cost savings target in the postal retail network.

(This comment seems to emphasize that there’s no specific goal in mind for how many post offices will close or how much money will be saved.  A given number might require that more post offices be closed to reach the goal, which would suggest that it’s not an evaluation of the particular post office that is driving the decision, but the need to reach a certain amount of savings.)

A footnote indicates that while 3,650 are being reviewed, “it is a virtual certainty that the review process will not lead to all of them being discontinued, but it is premature to estimate the number” that will eventually be closed.

The category of facilities to be reviewed is as described in the Request for an Advisory Opinion: 2,800 low workload post offices, 380 stations and branches with insufficient demand and available alternate access, 180 retail annexes with revenue of less than one million dollars in FY 2010 and located within a half mile of at least five alternate access sites; and 260 post offices undergoing discontinuance when the closing regulations were changed a few weeks ago.

The Revised USPS Handbook PO-101 Will Be Used

The process for discontinuing an independent Post Office or a subordinate station or branch, either closing it permanently or consolidating it, is described in the USPS Handbook PO-101.  Boldt goes over the changes in the procedures and reviews the criteria for initial feasibility studies—postmaster vacancies, suspensions, earned workload below the minimum established level for the lowest non-bargaining (EAS) employee grade, insufficient customer demand, and the availability of alternate access channels.

In addition to altering the process for initiating a discontinuance, the revised regulations “aim to standardize and otherwise improve the administration and management of the discontinuance process.”  The process will become more “efficient,” remove “waiting periods,” eliminate the requirements of circulating hard copies, and make increased use of a new computer system. The new procedures will also apply the same closing process to stations and branches as post offices, thus addressing some “public confusion” about why there’s a difference.

Boldt describes the new web-based database program, the Change Suspension Discontinuance Center (CSDC) program, that the Postal Service has used select candidates for discontinuance study. “The CSDC program streamlines and improves the overall discontinuance process, with specific goals of improving the standardization and tracking of retail facility closures and consolidations, and providing greater transparency over discontinuance activities.”

So now that it’s a top-down process, HQ will use the CSDC to pick post offices, and then notify local personnel to conduct a feasibility study.  They will seek customer input by sending out questionnaires and making them available to walk-in customers, and they make the surveys available online as well.  “In almost all instances, responsible personnel hold community meetings to discuss the potential discontinuances.”

As a footnote states, “Under the revised regulations, a community meeting is required at either the initial feasibility study stage or the post-proposal stage, except where high-level management has instructed otherwise because it would be infeasible to hold a community meeting.”

All the feedback from customers informs the feasibility study and determines whether a post office should be advanced in the discontinuance process.  If it goes forward, the public receives formal notice of the Postal Service’s intention to discontinue a post office through the posting of a proposal. The proposal includes discussions of community postal needs, the effect on the community, the effect on employees, and economic savings. In many cases, customers submit comments using prescribed forms. Other customers transmit comments in the form of correspondence. This information is used to assess the proposal for discontinuance.

After the conclusion of the 60-day proposal posting period, management considers the comments, along with any other available information, and decides whether to recommend discontinuance. This recommendation is reviewed by both field and Headquarters management. If Headquarters concurs, then a final determination is posted for a 30-day period. Customers served by a Post Office have 30 days from the date of posting to appeal the final determination to the Postal Regulatory Commission. An additional 30-day waiting period will occur subsequent to the posting of the final determination, unless an appeal is timely filed with the Postal Regulatory Commission.

Management estimates that in normal circumstances, a discontinuance study may be concluded in 138 days, including the posting period and subsequent waiting period after the posting of a final determination, assuming that no appeal to the Postal Regulatory Commission is received. (It should be noted that in the past it took nine months to close a post office.  You can read more about what these changes are all about in “How Fast Can You Close a Post Office.”

Application of the Handbook PO-101 to the RAO Initiative

Postal Headquarters has thus compiled a list of post offices that have met the criteria described above, and it advised field management on July 26, 2011 to begin feasibility studies of the identified Post Offices and subordinate retail units.

The Postal Service expects that the process of initiated these studies will take place on a rolling basis over a ten-week period.  This means that during August and September, communities will start receiving surveys and questionnaires, and then public meetings will be scheduled.  Based on all the information that’s gathered, local management will determine which retail facilities should be recommended for discontinuance. Where applicable, final determinations will be posted in Post Offices, stations, and branches beginning in late October, 2011.

There’s then a 30 day period during which an appeal can be filed, and another 30 day “waiting period.”  “Accordingly, any resulting change in service at affected Post Offices, stations, and branches selected for discontinuance will occur no earlier than December 2011, which is more than 138 days after the date of the Request in this docket. As field management processes each discontinuance action, closings will continue from that point forward on a rolling basis.”

The USPS Requests an Advisory Opinion

[PRC Advisory Opinion Document Summary]

The formal document that initiates the process for an Advisory Opinion comes from the Postal Service, and it’s called “Request of the United States Postal Service for an Advisory Opinion
on Changes in the Nature of Postal Services,” and it’s dated July 27, 2011.

[The original document is here.]

The Request, as we’ll call it here, acknowledges that postal patrons accustomed to obtaining products and services at one location will experience a change in service by virtue of having to obtain them at another nearby postal retail facility or an alternate postal retail access channel. 

The Request states, “No facility closure or service change resulting from this Initiative will be implemented before late December, 2011.”  However, as we shall see, this does not mean that the Postal Service is going to wait for the Advisory Opinion before proceeding.  It is already initiating the discontinuance process on the RAOI post offices, and there are likely to be post offices closing before the end of the year.

Objectives and Goals of the RAO Initiative

The Request reviews relevant statutes, including the key passage in 39 U.S.C. (Title 39), which states: “The Postal Service has been established to operate as a basic and fundamental service to the American public that binds the Nation together through the personal, educational, literary, and business correspondence of the people.  Management of the national postal system involves the balancing of important service, operational and financial objectives, including the provision of adequate, prompt, reliable, and efficient services to all communities. A maximum degree of effective and regular service is to be provided to rural areas, communities and small towns where post offices are not self-sustaining. No small Post Office is to be closed solely for operating at a deficit.  The Postal Service is responsible for operating and maintaining such facilities and equipment as are necessary to pursue these objectives.”

The Request proceeds to add, however, that Congress also has directed the Postal Service to expand and promote a mix of alternative postal retail access channels. (This is a reference to Postal Accountability and Enhancement Act § 302(d), which, as anticipated on the pages of this website some time ago, may turn out to be a crucial passage in the arguments that will unfold over the coming weeks.)

The Postal Services notes that “postal customers have responded to the expansion of alternative channels for access to retail postal products and services by using them to conduct an ever-growing proportion of their postal transactions. The objective of the RAO Initiative is to evaluate certain categories of facilities within the postal retail network to determine whether their numbers can be reduced while the Postal Service still ‘maintain[s] postal facilities of such character and in such locations, that postal patrons throughout the Nation will, consistent with reasonable economies of postal operations, have ready access to essential postal services.39 U.S.C. § 403(b)(3).’”

The goals of the RAOI are as follows:

  • evaluate the level of earned workload, customer demand, and/or availability of alternatives of a retail facility in determining whether it should be studied for discontinuance;
  • apply revised discontinuance rules to locally-initiated discontinuance actions already in progress that have not advanced to the community meeting stage;
  • improve efficiency and enhance customer convenience in the provision of retail services through the use of alternate access; and
  • capture the resulting cost savings if a determination is made to close a postal retail facility.

The Postal Service explains that post offices are no longer the sole means by which postal customer retail transactions may occur. The Postal Service has created a wide range of tools by which it can extend service beyond traditional "brick and mortar" postal retail facilities. 

The Postal Service is also introducing the concept of a “Village Post Office,” a contractor-operated retail unit at which customers will be able to purchase stamps and pre-paid Flat Rate packaging.  “Collectively, these alternatives extend, facilitate, and often expedite customer access to retail postal transactions that once required a visit to a retail window during specified hours at a Post Office, station or branch.”

Scope of the RAO Initiative

The Request proceeds to describe the scope of the RAO initiative.  There are 26,880 Post Offices and approximately 5,610 stations and branches in the United States.  There are 3,532 facilities included in the RAO initiative:

  1. 2825 Post Offices with low earned workload and no greater than $27,500 in total annual revenue;
  2. 384 stations and branches that earned fiscal year 2010 (FY) revenue of less than $600,000, that had FY 2010 revenue less than the average for FYs 2008 and 2009, and that are located within two miles of at least five postal retail and/or alternate access sites;
  3. 178 retail annexes that had FY 2010 revenue of less than $1 million and are located within a half-mile of at least five postal retail and/or alternate access sites;
  4. 265 Post Offices, stations, and branches that were undergoing locally-initiated discontinuance review independently of RAO at the time of the Postal Service's recent amendment to its retail facility closing regulations, but had not advanced to the community meeting stage of the review process.

This last group is included in the Initiative in order to ensure consistency with the rest of the facilities, so they will all fall under the new procedures in Handbook PO-1018 (effective July 14, 2011). 

The Recently Amended Discontinuance Procedures Will Be Employed

The new procedures for discontinuance are largely a response to criticisms made about the closing process in the PRC Advisory Opinion on the Stations and Branches Optimization Initiative of a couple of years ago.  Now the Postal Service will ensure that customers are given adequate notice that their post office may close.  The new rules identify several factors in making determinations to close or consolidate a post office, including the effects on the community and employees, economic savings, the policy in section 101(b) that it provide a maximum degree of effective and regular postal services where post offices are not self-sustaining, and such other factors as the Postal Service determines are necessary.

The changes in the procedures include the following:

1. Top-down process: Under previous regulations, the Postal Service exclusively used a “bottom-up” process to identify Post Offices for possible discontinuance. Under the new rule, Postal Service Headquarters management can also identify candidate offices for initial feasibility studies, thereby making clear the possibility of a “top-down” approach to initial stages of the process for post offices in addition to the former “bottom-up” approach. This measure is intended to improve consistency of decision-making.

2. Factors to Trigger an Initial Feasibility Study: The factors include earned workload below the minimum established level for the lowest non-bargaining (EAS) employee grade; insufficient customer demand; and the availability of alternate access channels. These factors only inform whether the initiation of a study is warranted; they do not modify legal requirements for justifying an ultimate decision on whether to close or consolidate a facility.

3. Process Management: The new rule “improves” the discontinuance process by removing steps such as waiting periods at the end of the discontinuance process, removing requirements for internal circulation of hard-copy documents, and facilitating efficiency of the decision-making process through utilization of internal web- based operating data access and review.  (In other words, it streamlines the process and speeds it up.)

4. Station and Branch Discontinuance: Until issuance of the final rule on July 14, 2011, the Postal Service had not subjected stations and branches to the same public notice and comment periods that have long applied to Post Office discontinuance. Rather, the procedures for stations and branches were more abbreviated. The final rule erases virtually all of these differences and now applies the same time posting periods and community input procedures to stations and branches.

The closing process has already begun

The Postal Service is not waiting to hear the Advisory Opinion before it begins the closing process on these 3,650 post offices.  As of July 27, 2011, headquarters has instructed local postal managers to begin initial feasibility studies of RAO candidate retail facilities within their geographic areas of responsibility. Some “subset” of this list will be identified for further consideration, but “it is premature at this time to estimate the size of this subset.”

The Postal Service anticipates that field personnel will initiate discontinuance actions that are part of the RAO Initiative serially, on a minimum ten-week rolling period beginning from July 26, 2011.

The Request proceeds to point out that just because the discontinuance process has begun for a facility does not mean it will close.  Moreover, service does not actually change until the post office closes, and the post offices won’t start closing until after the PRC issues its Opinion.

The local 60-day public notices announcing the discontinuance of particular facilities are expected to be issued beginning in late October and into late December 2011.  At the end of the 60 days, if no appeal is filed, the post office can be closed, so post offices could start closing as early as late December.

The Request clarifies that all of this does not apply to the facilities already begun for discontinuance on an “ad hoc basis,” i.e., those being closed when the plan was there was no plan.  These post offices can be closed while the PRC is working on its Opinion.

Additional Materials

There are five items included in the initial Request [the official list is here]:

  1. United States Postal Service Handbook PO-101 (July 2011) [document here]
  2. Retail Access Optimization Initiative Discontinuance Candidate Facility List
  3. List of Retail Facilities Undergoing Discontinuance Review Outside the Scope of the RAO Initiative
  4. Nonpublic Material Related to Postal Location “Nearest- Neighbor” Calculation and Results
  5. Nonpublic Material Related to Revenue Distribution and Single Stamp Sale Analyses

The Handbook is already an issue, since it incorporates some procedural changes that have been challenged by NAPUS, and the PRC has not ruled on that issue.  Two changes, concerning the meaning of consolidation and the policy that a post office must have a postmaster, have been deferred.  

(The RAOI list itself does not seem to be properly presented in the docket.  The Nearest-Neighbor location material is very interesting, andit's discussed here.  The Revenue Distribution and Single Stamp Sale documents are not available to the public, and this has already become an issue; a request has been made to make them public — more here.)

Why does the Postal Service want to destroy the Post Office?

August 8, 2011

The Postal Service says that closing 3,600 post offices could save $200 million.  That’s one-third of one percent of its annual budget, and just 2.5% of the $8 billion it expects to lose this year.  Closing post offices isn’t going to help solve the Postal Service’s financial problems, so why do they want to close all those post offices?

You can get some insight into that mystery by reading a handful of the thousands of news articles that have come out over the past weeks about post offices slated for closing.  Even if your post office isn’t on the lists, it’s worth reading a few.  

Be sure to get past the part where the reporter repeats the mantra from the Postal Service about how much money they’re losing, how everyone is using email these days, and how no one goes to the post office anymore, so they have to “right-size” the network by closing thousands of post offices.  It’s all from the press release, and it’s just a distraction.

You can also skip over the part where the Postal Service gives out the line, “don’t worry, just because your post office is on the list doesn’t mean it will necessarily close.”  That’s just to calm you down.   Don’t believe it.  By this time next year, four thousand communities may find themselves without a post office.

Get to the honest part of the article where the reporter went to the post office to get a few quotes from local citizens.  You’ll read how losing the post office feels like having a limb cut off, how the post office is the heart and soul of the town, how closing the post office is like losing a member of the family, how the post office gives people a sense of identity—they even get attached to their ZIP code and worry that without it, their town will “fall off the map.”

The academic word for this attachment to a place like the post office is topophilia — “love of place.”  It’s a natural human need to form these attachments, and it hurts when the attachment is torn.  But that’s exactly what the Postal Service is doing when it closes post offices.  It’s destroying a human connection to a place. 

But closing a post office doesn’t just take away a place that people value.  For many communities, the post office is holding the town or neighborhood together.  In a deeply existential way, the post office is the place.  That’s why people are so afraid to lose their post office.  It’s not just about inconvenience.  It’s about how closing the post office will hurt the neighborhood or the downtown business district.  It’s about how closing the post office will kill the town.

The Postal Service is going to be inflicting a lot of pain by closing all those post offices, but its explanation—that it faces a huge financial crisis—doesn’t wash.  It’s not that the financial problem facing the Postal Service isn’t real.  It’s just that post offices have nothing to do with it.  The problem, as every postal worker knows, is the requirement that the Postal Service pay for the future health benefits of employees that haven’t even been hired yet.

So why cause all that pain if it’s not going to help solve the financial problem?

Vigil in Modesto: Auction ends today, and whoever wins, we all lose

August 4, 2011

The post office on 1125 I Street in Modesto, California, closed on June 3, 2011, and it’s been up for auction since June 9th.  The bidding ends in a few hours, on Aug. 4 at 5:41 p.m. central time.  Whoever wins this auction, we’re all going to come out losers.  The Modesto post office is a national treasure, and it’s a crime that the government has seen fit to sell it off. 

So far there have been four bidders, and as of early this morning, the going price is $650,000.   (The bidding deadline keeps getting extended, so check for Updates at the end of this post.)  There may be a flurry of last-minute bidding, but if the price is anything like this, that only makes the crime worse.  Similar post offices in Palm Beach, Florida, and Westport, Connecticut, have sold for over $3 million.  You can follow the bidding today to its sad final moment on the website of the GSA auctions page—it’s featured in the slide show at the top.

Also known as the Modesto Federal Building and the El Viejo, the building was always occupied by a post office, but in 1967 work on a new postal facility was completed and downtown Modesto was demoted from a main post office to station status.  Workers were transferred to the new facility, leaving behind only a small retail operation.  Other agencies, like the IRS, occupied the empty space, and custody of the building transferred from the Office of the Post Office to the General Services Administration in 1968.  It’s the GSA that’s conducting today’s auction.

The post office contains nine original wall murals in the lobby, commissioned by the Treasury Relief Arts Project. The oil paintings were done in 1937 by Ray Boynton, with the assistance of several local artists, and they depict agricultural scenes: plowing, sorting and harvesting grapes; irrigating orchards; meat and cheese packing; grain harvesting and feeding cows. 

In 1989, the GSA commissioned an historic structures study, apparently with the intention of restoring the building.  At almost 100 pages, the report contains a wealth of information.  Planning on the building began in 1913, a site was purchased in 1916, an appropriations bills to pay for it was defeated in Congress in 1919, a subsequent appropriation bill was approved in 1930, and it was finally completed in 1933. 

Its design and construction were supervised by James Wetmore, Acting Supervising Architect for the Treasury Department.  Wetmore gets the official credit for designing hundreds of public buildings in the 1930s, although there are only a few of them in California. The post office was the first civil federal structured erected in Modesto.

As the historic structure report states, “The Modesto Federal Building’s architectural significance and generally excellent condition demand a sensitive approach to the conservation of its remaining building fabric.  At the same time, it must be realized that the building will continue to function as an active public building.” 

Unfortunately, the report got that wrong.  It’s unlikely that the El Viejo is going to remain an active public building.  Non-profit groups, working through county officials, did express interest in buying the building, but the GSA decided to auction it to the highest bidder.  It will probably turn into a real estate office (as in Palm Beach) or a clothing store (as in Greenwich CT).

Robber Barons Plunder the Post Office

August 2, 2011

Over four thousand post offices slated to be closed, and just as many news articles about the closings, yet not a word in the media about the billionaires and millionaires who are running the show.  All you hear is how postal revenues are declining and no one uses the post office anymore.  But somehow the Postal Service was still able to outsource $12 billion in 2010. 

It’s not hard to see what’s going on.  The Robber Barons are stealing the post office from the American people.  Closing down post offices to save a little money is just a big distraction, a show to make it look like the Postal Service is acting like a responsible business.  In the meantime, the Robber Barons are plundering the postal system via the outsourcing contracts they’ve negotiated with cooperative Postal Service executives.

Two of the six richest men in the country are Charles and David Koch, with combined assets of over $40 billion.  Some of that money gets funneled to Tea Party politicians like Darrell Issa and Dennis Ross, who are co-sponsoring a Postal Reform Act that is all about attacking unions and closing down post offices.  The Koch brothers also founded and fund the Cato Institute, a right-wing think tank that cranks out white papers arguing for the liberalization of the postal “monopoly” and privatizing the postal system, preferably after the system has been streamlined by cost cutting measures like breaking down union contracts and closing “under-performing” post offices.

Next come the major stakeholders of the postal system—the corporations that do big business with the Postal Service.  At the top of that list is FedEx, the biggest stakeholder of them all by far.  For servicers rendered to the USPS in 2010, FedEx took in $1.37 billion.  And FedEx CEO Fred Smith, who likes to rail against the Postal Service, earned a total compensation of $10.4 million in 2008, and he’s surely making more this year.

Northrup Grumman is the second largest beneficiary of postal contracts.  It took in about a half billion dollars from the USPS in 2010.  Grumman CEO Wes Bush earned almost $23 million last year.

Louis Giuliano is the Chairman of the USPS Board of Governors.  His salary is an honorarium, $30,000 a year.  But when he was chair of ITT, he made about $15 million a year.

Those are the kind of people making the decisions to close the post offices.  They are part of a corporate elite that runs everything in America, including the Postal Service.

JUST OUT

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Also: Sarah Ryan's "Understanding Postal Privatization: Corporations, Unions, and the "Public Interest"


 

Privatization in the UK

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Organizing to Save Rural Post Offices


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