postalnews blog

Second quarter Revenue, Pieces and Weight data released by the US Postal Service this week confirmed the continuing decline in mail volume, especially first class mail. While revenue for the three month period ending March 31 was up by 3.5% from the prior year, the increase was entirely due to last year’s price hike, as total mail volume dropped by 3.3%.

First class mail was also down by 3.3%, but virtually all of the decline was in the highest priced sub-class, single piece letters, which declined by 5.8%. The average revenue per single piece was 51 cents. By contrast, first class automation presort volume remained about the same as the prior year, dropping just 0.2%. The average revenue for each automated presort piece was 34 cents.

Standard mail pieces continue to slightly outnumber first class, with about 51% of the total volume. Standard mail declined slightly less than first class, down 3% from 2007. The average piece of standard mail brought in 21 cents in revenue.

The steepest decline in volume was in the Postal Service’s highest priced product, Express Mail, which declined by 14.3%. While Express Mail is the most expensive option offered by the USPS, it now represents just 1.2% of total revenue.

Priority Mail declined by 4.3%, reflecting the softening of the overall package delivery market. Each piece of Priority was worth $6.23 in revenue. Interestingly, while the average weights of first class and standard mail pieces dropped slightly from the prior year, the average Priority Mail piece was heavier, possibly reflecting increased usage of Priority Flat rate boxes.

By Neil Roland

April 25 (Bloomberg) — The U.S. Postal Service could save millions of dollars by diverting customers from postoffice counters to the Internet or telephone when they request that their mail be held or redelivered, an internal audit said.

Such services generate no revenue for the government agency while requiring 6.9 percent of the annual time of postal clerks, according to the report, filed by the Postal Service’s inspector general. The agency should install computers and telephone lines in post office lobbies so customers can order mail services without going to the counter, the report said.

The report, posted this week on the Postal Service Website, comes as the agency is trying to cope with a possible$2 billion loss this year after a $5.1 billion deficit last year. Agency officials cited in the report said they would try to come up with a plan by June to promote use of the Internet and telephone.

The report said the Postal Service also should set up parcel kiosks at post offices for customers who get a high volume of mail but often aren’t home. In each of two years cited in the report, more than 70 million parcels couldn’t be delivered on the first attempt. With kiosks, carriers could instruct customers to pick up items from lockboxes.

The Postal Service also should borrow an idea from FedEx Corp. and let customers designate evening delivery times when they will be home so they don’t have to pick up packages at the post office, the report said.

Raising Awareness

Auditors recommended that the Postal Service use itsforms and pamphlets to tell customers they can hold mail or request redelivery online or by phone. The agency also should post signs in post office lobbies, advertise on television and use Web banners to inform customers, the report said.

Postal clerks’ responses to over-the-counter customer requests for services that didn’t generate any revenue for the agency cost the Postal Service $238.5 million from 2005through mid-2007, the report said. That figure was computed using the average $38.71-an-hour pay rate for clerks during the period.

The Postal Service has previously announced plans to try to divert 4 percent of revenue each year from the postoffice counter to self-service venues including the Internet and kiosks. Those plans apply to revenue-producing items such as stamps.

Online and phone requests for non-revenue-generating services accounted for only 5.4 percent of all such transactions from 2005 to 2007, the report said.

Postal Service spokesman David Partenheimer declined to comment.

The Postal Regulatory Commission today established Docket No. PI2008-3 and invited public comment on universal postal service and the postal monopoly in the United States. The Postal Accountability and Enhancement Act (PAEA) requires the Commission to submit a report to the President and Congress on “universal postal service and the postal monopoly in the United States, including the monopoly on the delivery of mail and on access to mailboxes”. The report is to be submitted not later than December 19, 2008.

In preparing its report, the PAEA requires the PRC to “consult with the Postal Service and other Federal agencies, users of the mails, enterprises in the private sector engaged in the delivery of the mail, and the general public”. Further, the legislation requires the Commission to address in its report any written comments that it receives. As part of its effort to fulfill these obligations, the Commission is initiating this docket to solicit comments on universal postal service and the postal monopoly.

Initial comments are due 60 days after publication of the notice in the Federal Register. Reply comments are due 90 days after publication of this notice in this Federal Register. All comments and suggestions received will be available for review on the Commission’s website at www.prc.gov.

In addition to this solicitation of comments, the Commission intends to hold several public hearings at locations outside of Washington, D.C., in order to hear from a broad cross section of the mailing public. The dates and locations for those hearings are as follows:

May 21, 2008 (2 pm):
Flagstaff City Hall
211 West Aspen Avenue
Flagstaff, AZ 86001

June 5, 2008 (10 am):
City Hall/Court House Building
City Council Chambers, 3rd Floor
15 Kellogg Boulevard
St. Paul, MN 55102

June 19, 2008 (2 pm):
City Hall
1 Junkins Avenue
Portsmouth, NH 03801

Additionally, the Commission intends to sponsor an open workshop in Washington, D.C. during May 2008, to receive public comment.

Further details on the field hearings and other steps to be taken in this docket will be posted on the Commission’s website at www.prc.gov.

By Neil Roland

April 17 (Bloomberg) — The U.S. Postal Service doesn’t provide effective oversight of government-issued credit cards that are used by employees for postal-vehicle services, exposing tens of millions of dollars to waste, abuse and possible fraud, auditors said.

The federal agency failed to confirm $13.7 million in vehicle fuel purchases and maintenance and repairs in fiscal 2007, and a number of other transactions were marked as verified when they hadn’t been, a report on the Postal Service inspector general’s Web site indicates.

Many Postal Service managers lacked proper training, didn’t ensure the security of the Voyager Cards, failed to maintain current employee PIN lists and didn’t keep proper documents , according to the report, which was dated March 21 and posted today.

“While we did not identify any fraudulent Voyager Card transactions, the Postal Service sites were at greater risk of fraud, waste and abuse because required internal controls for the Voyager Card Program were not in place,” the 31-page report said.

Since January 2000, the Postal Service has had a contract with U.S. Bancorp, the sixth-biggest commercial bank in the U.S., for the cards. The agency issued about 250,000 Voyager cards in the U.S. as of 2006; last year, there were about 9.3 million Voyager card transactions, for a total of $389.3 million, the report said.

Postal Service management agreed with the findings and directed subordinates to tighten oversight of the Voyager Card program, the report said. Postal Service spokesman David Partenheimer had no immediate comment. U.S. Bancorp spokesman Steve Dale declined to comment.

The findings come as the Postal Service, a government agency required by law to set rates to cover costs, tries to cope with a possible $2 billion loss this year after a$5.1 billion deficit last year. Postmaster General Chief Executive John Potter said last month he’s trying to find ways to cut $2 billion in costs. First-class stamps will rise a penny to 42 cents on May 12.

The U.S. Department of Justice’s U.S. Attorney’s office for Connecticut issued the following press release:

Nora R. Dannehy, Acting United States Attorney for the District of Connecticut, announced that ANTHONY HARLEY, 45, of Bridgeport, pleaded guilty today before United States Magistrate Judge Joan G. Margolis in New Haven to one count of obstruction of the mails.

According to documents filed with the Court and statements made in court, on July 19, 2004, while working as a full-time mail handler with the United States Postal Service at the Stamford Mail Processing Plant, HARLEY took two separate pieces of mail not addressed to him. One piece of mail contained black Teva sneakers and the second piece of mail contained a pair of Steiner binoculars. After taking the mail, HARLEY placed both items in his personal knapsack so that he could take them for his own use and benefit.

HARLEY is scheduled to be sentenced on July 2, 2008, at which time he faces a maximum term of imprisonment of six months and a fine of up to $5,000.

This matter was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Douglas P. Morabito.

Press release:

Marketers now face prison if they consistently ignore the wishes of consumers who do not wish to be contacted for marketing purposes.

The CPUT Regulations include 31 banned practices that will always be considered to be unfair. One of these is ‘making persistent and unwanted solicitations by telephone, fax, email or other remote media except in circumstances and to the extent justified to enforce a contractual obligation’. Breaching this banned practice is a criminal offence and carries with it a maximum fine of £5000 currently and or a term of imprisonment not exceeding two years.

The term ‘other remote media’ has yet to be defined, but there is the argument that this could include direct mail sent through the post. If this is so, the Mailing Preference Service will have legislative backing providing greater protection for its subscribers.

Janine Paterson, Legal and Public Affairs Advisor at the DMA, warns: “Companies ignoring the TPS and persistently calling numbers registered on the scheme have got away lightly. Now however they could face prison if they continually call numbers against the consumer’s wishes. The DMA welcomes this new legislation and is advising members on this and other elements of CPUT Regulations and the Business Protection from Misleading Marketing Regulations. ”

Companies ignoring TPS face prison warns DMA

Press release:

WASHINGTON, March 17 Free and green. Those are the goals of a pilot program launched today by the U.S. Postal Service that allows customers to recycle small electronics and inkjet cartridges by mailing them free of charge.

The “Mail Back” program helps consumers make more environmentally friendly choices, making it easier for customers to discard used or obsolete small electronics in an environmentally responsible way. Customers use free envelopes found in 1,500 Post Offices to mail back inkjet cartridges, PDAs, Blackberries, digital cameras, iPods and MP3 players - without having to pay for postage.

Postage is paid for by Clover Technologies Group, a nationally recognized company that recycles, remanufactures and remarkets inkjet cartridges, laser cartridges and small electronics. If the electronic item or cartridges cannot be refurbished and resold, its component parts are reused to refurbish other items, or the parts are broken down further and the materials are recycled. Clover Technologies Group has a “zero waste to landfill” policy: it does everything it can to avoid contributing any materials to the nation’s landfills.

It was this philosophy that won Clover the contract with the Postal Service, besting 19 other companies, said Anita Bizzotto, chief marketing officer and executive vice president for the Postal Service.

“As one of the nation’s leading corporate citizens, the Postal Service is committed to environmental stewardship,” Bizzotto said. “This program is one more way the Postal Service is empowering consumers to go green.”

The free, postage-paid Mail Back envelopes can be found on displays in Post Office lobbies. There is no limit to the number of envelopes customers may take.

The pilot is set for 10 areas across the country, including Washington, D.C., Chicago, Los Angeles and San Diego, but could become a national program this fall if the pilot program proves successful.

The Postal Service recycles 1 million tons of paper, plastic and other materials annually. Last year, USPS generated more than $7.5 million in savings through recycling and waste prevention programs. The nation’s environmental watchdog, the Environmental Protection Agency (EPA) has awarded the Postal Service eight WasteWise Partner of the Year awards, the agency’s top honor.

The Mail Back program is another example of the Postal Service’s commitment to sustainability. USPS is the only shipping or mailing company in the nation to receive Cradle to CradleSM Certification from MBDC (McDonough Braungart Design Chemistry) for human and environmental health. More than half a billion packages and envelopes provided by the Postal Service annually are nearly 100 percent recyclable and are produced with the least harmful materials. Based on the recycled content of these envelopes and packages, more than 15,000 metric tons of carbon equivalent emissions (climate change gases) now are prevented annually.

“We know our customers are interested in real solutions for proper disposal of personal electronics,” Bizzotto said. “Everyone from consumers to businesses to non-profit organizations use the mail, and the Postal Service works to manage resources wisely to minimize environmental impact.”

Please Note: For broadcast quality video and audio, photo stills and other media resources, visit the USPS Newsroom at www.usps.com/communications/newsroom/welcome.htm .

An independent federal agency, the U.S. Postal Service is the only delivery service that visits every address in the nation - 146 million homes and businesses. It has 37,000 retail locations and relies on the sale of postage, products and services to pay for operating expenses, not tax dollars. The Postal Service has annual revenues of $75 billion and delivers nearly half the world’s mail.

Founded in 1996 in Ottawa, Illinois, Clover Technologies Group has rapidly grown into the global leader in the collection, remanufacturing and resale of small electronic assets, laser cartridges, and inkjet cartridges. Clover Technologies Group has spent many years on the Inc. 500 list for the Fastest Growing Private Companies and has achieved a 384% compounded annual growth rate over the past 4 years. In 2005, the founders of Clover Technologies won the E&Y Entrepreneur of the Year award. Globally, Clover has 15 facilities and more than 2,000 employees.

JUDY C. TEXEIRA, Petitioner, V. UNITED STATES POSTAL SERVICE, Respondent.

Petition for Review from the Merit Systems Protection Board in 5F0752060072-l-2
DECIDED: February 28, 2008

Before BRYSON and MOORE, Circuit Judges, and WOLLE, Senior District Judge.* PER CURIAM.

DECISION

Judy Texeira (Texeira) appeals from the decision of the Merit Systems Protection Board (Board), Docket No. 5F0752060072-I-2, that upheld her demotion by the United States Postal Service (agency) from her position of EAS-1 7 customer services supervisor at the Modesto Main Post Office to a part-time entry level position at the Post Office in Ripon, California. Texeira contends the Board erred in two respects. First, she contends the Board should not have split a single charge against her, enabling the Board to dismiss one charge but discipline her on a second lesser charge. Second, Texeira contends the Board imposed excessive punishment for the separate charge. We conclude the Board properly considered two charges, dismissing the more serious but upholding the lesser charge of timekeeping irregularity. We vacate the penalty on the lesser charge and remand this case to the Board to impose discipline that considers only Texeira’s conduct that proved the less serious charge.

BACKGROUND

In January of 2005, Texeira was supervisor of five window clerks and several floor clerks, and she was also finance supervisor at the Modesto Main Post Office. She had been a supervisor for about seven years, a postal employee for about nineteen years, and had no prior record of misconduct. On January 26, however, Texeira incorrectly posted 160 hours of annual leave for an employee she was supervising. The employee had not yet earned the leave, never earned it, and later returned the leave pay to the agency. When the agency learned about and investigated Texeira’s incorrect timekeeping entry, the manager of customer service at the Modesto Main Post Office served her with a notice of removal from federal service. The initial charge was a simple statement that she had incorrectly posted the unearned leave for an employee she was supervising. That notice of removal was revised on August 2, 2005 with a more detailed description of the conduct involved in her incorrect posting of annual leave, including a listing of several Postal Service rules and regulations that she allegedly had violated.

The notice stated: “Charge: Unacceptable Conduct: Falsification in Recording Time/Failure to Follow Proper Timekeeping Procedures.” When Texeira protested, the agency selected as its decisionmaker on the matter Richard Sarno, Human Resources Manager of the Sacramento District. Sarno conducted his own investigation and then on September 19, 2005 issued his Letter of Decision. He found the August 2 charges “fully supported by the evidence.” In his decision on discipline, he wrote and highlighted that removal from federal service would be “too severe.” He decided instead to reduce her in grade and pay to a part-time position at the much smaller postal facility in Ripon, California.

BOARD DECISION

On September 20, 2006, an Administrative Judge (AJ) held a plenary hearing, then filed his initial decision. The Board denied Texeira’s petition for review making the AJ’s decision the final decision in the matter. The AJ considered the agency charge as two charges, one for falsification of time records and the other for failure to follow proper timekeeping procedures. The AJ found the agency did not prove falsification but did prove the lesser charge. The AJ then upheld the same substantial penalty the agency had imposed for both charges.

In his decision the AJ first addressed Texeira’s argument that the agency had asserted a single charge against her that could not be divided into a greater charge and a lesser charge. The AJ held, based on Walker v. Derartment of the Navy, 59 M.S.P.R. 309, 318 (1993), that a single act of misconduct could be read as presenting multiple charges, so long as each required different elements of proof. Noting that the agency decisionmaker Sarno testified at the Board hearing that he considered the agency’s allegation to be a single charge, the AJ nevertheless decided the agency’s charge label gave rise to both the alleged falsification of recorded earned leave, and a separate alleged failure to follow proper timekeeping procedures. The AJ wrote that proof of an intent to deceive was an element of the charge of “Falsification in Recording Time,” but that an intent element was not required to prove failure to comply with proper timekeeping procedures. He dismissed the falsification charge as unproved, but found the agency had proved the second charge.

Having found the agency proved only the charge of failure to record an entry correctly, the AJ upheld the sanction of demoting Texeira to an entry level position at a post office outside Modesto. The AJ explained that the decisionmaker Sarno gave adequate consideration to all relevant penalty factors and wrote:
[lit is apparent from the deciding official’s analysis that he considered demotion to be appropriate even if [Texeira] had not attempted to defraud or deceive the agency. He testified that he “did not find that [Texeira] intentionally tried to defraud” the agency.

This gives rise to Ms. Texeira’s second ground for appeal, excessiveness of the penalty.

DISCUSSION

We review the Board’s decision under the authority of 5 U.S.C. § 7703(c) (2000),
which provides that the agency’s action must be sustained unless it is found to be:
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(2) obtained without procedure required by law, rule, or regulation having been followed; or
(3) unsupported by substantial evidence. See Kline v. Der’t of Transr., 808 F.2d 43, 44 (Fed.
Cir. 1986); Hayes v. Dep’t of the Navy, 727 F.2d 1535, 1537 (Fed. Cir. 1984). On the charge separation issue, we agree with the AJ’s analysis and conclusion.

The AJ correctly decided that the agency’s charge label gave rise to two separate charges, one falsification of recorded earned leave, and the other the failure to follow proper timekeeping procedures. Plainly the charge of “Falsification in Recording Time” required proof of an intent to deceive, an element not required to prove timekeeping or record keeping errors. Consequently, the AJ properly analyzed the two types of timekeeping offenses separately and had the authority to find the agency had proved the lesser charge but not the charge requiring intent. Moreover, the AJ carefully explained the factors considered in addressing Texeira’s credibility that was critical in deciding the intent issue. The AJ’s finding that Texeira had testified truthfully that she did not intend to defraud or deceive the agency when she posted annual leave for a fellow employee is supported by substantial evidence. The circumstances corroborated her explanation. In addition, the AJ found the agency had not proved that she “was guilty of falsification in recording time.” The AJ did, however, well document the proof that Texeira had not verified the incorrect annual leave she had posted, noting that Texeira had said she had made an error and admitted she “made a mistake.” We conclude that the AJ’s determination that the agency proved the lesser charge of failing to comply with agency timekeeping procedures is supported by substantial evidence. The description in the charging label plainly presented both a more serious charge of “falsification” and a less serious charge concerning a timekeeping violation.

We find merit in Texeira’s second contention that the penalty must be reconsidered by the agency in light of the Board’s dismissal of the falsification charge. When falsification was not proved, the original penalty was too severe. We do not lightly review agency disciplinary decisions. These are necessary to promote the efficiency of government service. Parker v. U.S. Postal Serv., 819 F.2d 1113, 1116 (Fed. Cir. 1987). We give deference to the agency’s judgment unless a penalty violates a statute or regulation or is “so harsh and unconscionably disproportionate to the offense that it amounts to an abuse of discretion.” Villelav. Dep’t of the Air Force, 727 F.2d 1574,1576 (Fed. Cir. 1984) (citing Power v. United States, 531 F.2d 505 (Ct. Cl. 1976)). The Court has written that our review of M.S.P.B. decisions must allow the Board “wide latitude in fulfilling its obligation to review agency disciplinary actions.” U.S. Postal Serv. v. Greciory, 534 U.S. 1 6-7 (2001) (“It is not for the Federal Circuit to substitute its own judgment for that of the Board.”).

But our deference to the Board’s wide latitude is not unlimited. Agencies and the Board are obligated responsibly to consider and balance relevant factors for each individual case before selecting an appropriate penalty; and the Board has listed twelve factors—so called Douglas factors—to assure that the punishment “strikes a responsible balance within tolerable limits of reasonableness.” Doucilas v. Veterans Admin., 5 M.S.P.R. 280, 305-06 (1981). Pertinent here, the Board in Douglas wrote:

Whenever the agency’s action is based on multiple charges some of which are not sustained, the presiding official should consider carefully whether the sustained charges merited the penalty imposed by the agency. In all cases in which the appropriateness of the penalty has been placed in issue, the initial decision should contain a reasoned explanation of the presiding official’s decision to sustain or modify the penalty, adequate to demonstrate that the Board itself has properly considered all relevant factors and has exercised its judgment responsibly.

Moreover, in Kline v. Department of Transportation, 808 F.2d at 45, our court addressed, as we again do here, the question whether the Board correctly upheld a penalty when only one of several charges against an employee had been proved. We vacated the penalty and remanded the case to allow the agency’s deciding official to determine an appropriate penalty for the single proved charge. We there emphasized that the deciding official made no finding about what the penalty would be if fewer than all charges were proved. We wrote: “[The] record does not demonstrate that the presiding official identified, balanced and then considered the relevant Douglas factors in determining that the sustained charge warranted the penalty imposed.” 808 F.2d at 46.

Similarly, the record here does not support the AJ’s statement that the decisionmaker Sarno “considered demotion to be appropriate even if [Texeira] had not attempted to defraud or deceive the agency.” Sarno did not so testify, neither did he write nor imply in his decision that he would have imposed the same discipline for a mere timekeeping error. Sarno testified: “I was losing trust and faith in her.” And he testified: “I believe she did it on purpose to do something for a friend and she made a huge mistake.” And he testified: “She paid somebody that didn’t deserve to get paid. I think she did it on purpose. She did it for a friend and it was wrong.”

This record demonstrates a decisionmaker imposing a severe penalty because he believed the agency had proved Texeira guilty of purposeful falsification, not just the failure to make a correct entry of vacation time. The agency has not yet articulated what less severe sentence should be imposed when it proved only a much less severe charge. The first of the twelve factors listed in the Board’s Douglas decision is “the nature and seriousness of the offense.” The agency decisionmaker gave no rational basis for
imposing a severe sentence on a less serious charge. When that factor was not properly considered, the penalty imposed was disproportionate to the proved charge and unsupported by substantial evidence. We remand for reconsideration of the penalty to be imposed on the lesser charge only.

CONCLUSION

We affirm that part of the Board’s final decision that upheld the agency’s charge that Ms. Texeira failed to follow proper timekeeping procedures, but we vacate the Board’s final decision that upheld the agency’s penalty of demotion to a part-time position on that charge. The case is remanded so an appropriate penalty can be imposed based only on the improper timekeeping charge.

Press release:

Postmaster General Jack Potter announced two new officer selections today. Ross Philo (left) was named Executive Vice President and Chief Information Officer (CIO) and George Wright was named Vice President, Information Technology Operations.

“The long-term success of the Postal Service as we work to grow our business in an extremely competitive marketplace is inextricably linked to the strategic application of state-of-the-art information systems at every level and across every function of the organization, “ said Potter. “Ross and George offer the experience, leadership and shared vision that will help us to achieve these critical goals.”

Philo joins the Postal Service after more than 30 years experience with large, complex, multinational corporations such as Cisco Systems and Schlumberger, where he was responsible for the development, implementation and management of extremely complex information systems. “Ross is an internationally recognized and respected information systems expert,” said Potter. “His work in systems integration and alignment among business units contributed to their leading market positions.”

Most recently, Philo served as Senior Vice President and CIO of Halliburton and subsequently as Chief Executive Officer of Visean, a global, oil-field services start-up company. He is a graduate of London’s Imperial College of Science and Technology where he earned First-Class honors. Philo will report directly to PMG Potter. “As a member of the Executive Committee, Philo will play a significant role in the development of growth, service and administrative initiatives by assuring that their planning and development are fully linked from inception with the appropriate technology strategy,” said Potter.

Wright is a 25-year USPS employee who has served as manager of Enterprise Architecture and Standards as well as Finance and Administration Systems. He has a Master’s degree in business administration from Maryland University. Wright has served as Acting Vice President, Chief Technology Officer since October 2007 and will report to Philo in his new assignment. “George has gained a valuable familiarity with the information systems and technology that support our operational, financial and administrative functions,” said Potter. “He is responsible for the day-to-day management and operation of our vast information-technology infrastructure.

“Please join me in offering your full support to Ross and George as we welcome them to their new assignments.”

On January 3 of this year, postal activist Douglas Carlson filed a complaint alleging that the USPS had improperly stopped offering Bound Printed Matter rate to retail customers. On February 4, the Postal Service filed a motion requesting that the PRC suspend action on the complaint, saying that it was preparing “classification changes intended to resolve the substance of the instant Complaint”. If the changes were to be approved by the Board of Governors, the USPS would then “file a further pleading in this docket explaining how the action resolves this Complaint”. If that arrangement wasn’t acceptable to the PRC, the USPS requested an additional two months to prepare a statement on the Carlson complaint.

Yesterday the PRC denied the USPS motion, pointing out that under the law, the Commission must either dismiss or take action on complaints within 90 days. Since that time period will expire on April 2, the USPS’s suggested deadline of April 4 for its statement on the complaint was not acceptable. The PRC denied the USPS motion, and ordered it to issue a statement on the complaint no later than March 7.