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.”

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