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?

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