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OFFICIAL TRANSCRIPT OF PROCEEDINGSBEFORE THEPOSTAL REGULATORY COMMISSIONIn the Matter of:SIX-DAY TO FIVE-DAY STREETDELIVERY AND RELATED SERVICECHANGES)Docket No.:N20l0-1VOLUME 11Pages:3084 through 3350Place:Washington, D.C.Date:October 4,2010HERITAGE REPORTING CORPORATIONOfficial Reporters1220 L Street, N.W., Suite 600Washington, D.C. 20005(202) 628-4888contracts hrccourtreporters corn.
3084POSTAL REGULATORY COMMISSIONIn the Matter of:SIX-DAY TO FIVE-DAY. STREETDELIVERY AND RELATED SERVICECHANGES)Docket No.:N2010-1Suite 200Postal Regulatory Commission901 New York Avenue, N.W.Washington, D.C.Volume 11Monday, October 4,2010The above-entitled matter came on for ahearing, pursuant to notice,at 9:32 a.m.BEFORE:HON. RUTH Y. GOLDWAY, ChairmanHON. TONY HAMMOND, Vice ChairmanHON. DAN G. BLAIR, CommissionerHON. NANCI E. LANGLEY, CommissionerHON MARK ACTON, CommissionerAPPEARANCES:On Behalf of United States Postal Service:MICHAEL TIDWELL, EsquireKENNETH HOLLIES, EsquireUnited States Postal Service475 L’Enfant Plaza West, S.W.Washington, D.C.20260(202) 268-3083On behalf of National Association of Letter Carriers:PETER DECHIARA, EsquireCohen, Weiss and Simon, LLP330 West 42nd StreetNew York, New York 10036-6976(212) 563-4100Heritage Reporting Corporation(202) 628-4888
3085APPEARANCES:(Continued)On Behalf of Postal Regulatory Commission:MICHAEL RAVNITS1CY, Special Counsel to the ChairmanKIRSINE DEBRY, Special Assistant to the ChairmanAPRIL BOSTON, Special AssistantDARCIE TOKIOICA, Special AssistantPAUL HARRINGTON, Special AssistantSUSAN MARSHALL, Special AssistantSTEPHEN L. SHARFMAN, General CounselFor the Public Renresentatives:PATRICIA GALLAGHERKENNETH MOELLERLAWRENCE FENSTER901 New York Avenue, N.W.Washington, D.C.Heritage Reporting Corporation(202)628-4888
IRDIREFor the National Association of Letter Carriers:Peter BoatwrightBy Mr. HolliesBy Mr. Dechiara3108Melissa StarrBy Mr. TidwellBy Ms. Gallagher3316----330831453310334733283348DOCUMENTS TRANSCRIBED INTO THE RECORDPAGEWritten Surrebuttal Testimony of United StatesPostal Service, Witness Alan Moore,US PS RT -23090Written Surrebuttal Testimony of United StatesPostal Service, Witness Samuel Pulcrano,US PS RT -43096Written Surrebuttal Testimony of United StatesPostal Service, Witness Peter Boatwright,USPS-RT-13112NALC Cross Examination No.23197NALC Cross Examination No. 43256Written Surrebuttal Testimony of United StatesPostal Service, Witness Melissa Starr,USPS-RT-33318--Heritage Reporting Corporation(202)628-4888
3087EXHIBITSEXHIBITS P ND/CR TESTIMONYIDENTIFIEDRECEIVEDSurrebuttal testimony ofAlan Moore on behalf ofthe United States PostalService, USPS-RT-230893089Surrebuttal testimony ofSamuel Pulcrano on behalf ofthe United States PostalService, USPS-RT-430953095Surrebuttal testimony ofDr. Peter Boatwright on behalfof the United States PostalService, USPS-RT-l31113111NALC-XE-l3164NALC Cross examinationExhibit No. 23196NA1 C Cross examinationExhibit No. 33245NALC Cross examinationExhibit No. 43255Surrebuttal testimony ofMelissa Starr on behalf ofthe United States PostalService, USPS-RT-33317Exhibit No. PR-USPS-RT-3/l3334Heritage Reporting Corporation(202) 628-48883317
308812(9:32 a.m.)3CHAIRMANGOLDWAY:Good morning, ladies and4gentlemen.This hearing will come to order.I am5Ruth Goidway, Chairman of the Postal Regulatory6Commission.7Chairman Hammond and Commissioners Acton, Blair, and8Langley.Joining me today on October 4th are Vice9Today, the Commission will receive10surrebuttal testimony concerning the Postal Service’s11plan to eliminate Saturday delivery and related12service changes in Docket No. 112010-1.13Service sponsored four surrebuttal witnesses.14received timely requests to conduct oral cross-15examination of only two of these witnesses.16The PostalWeOur first order of business will be to enter17into the record the testimony of the other two Postal18Service surrebuttal witness.19have a procedural matter to discuss before we begin?20Does any participantIf not, Mr. Hollies or Mr. Tidwell, are you21prepared to move the admission of the testimonies of22Witnesses Moore and Pulcrano.23MR. TIDWELL:Good morning, Madam Chairthan,24Michael Tidwell for the Postal Service.I have two25copies of the Surrebuttal Testimony of Alan Moore onHeritage Reporting Corporation(202) 628-4888
30891behalf of the United States Postal Service designated2as USPS-RT-2.3from Mr. Moore attesting to his contents of this4testimony of penalty of perjury.5Attached to each copy is a declarationThe Postal Service would move that it be6admitted into evidence, and I would hand two copies to7the reporter.8CHAIRMAN GOLt)WAY:9Hearing none,10Any objections?the testimony Alan Moore isreceived into evidence and should be transcribed.11(The document referred to was12marked for identification as13USPS-RT-2,14in evidence.)1516171819202122232425and was received///////////1Heritage Reporting Corporation(202) 628-4888
3090USPS-RT-2BEFORE THEPOSTAL REGULATORY COMMISSIONWASHINGTON, D.C. 20268-0001SIX-DAY TO FIVE-DAY CARRIER DELIVERYAND RELATED SERVICE CHANGES, 2010Docket No. N2010-1SURREBUTtAL TESTIMONY OFALAN MOOREON BEHALF OF THEUNITED STATES POSTAL SERVICE
309112Autobiographical SketchMy name is Alan S. Moore. I am the Manager of Labor Relations, Policy and3Programs, for the United States Postal Service at its national headquarters at4475 L’Enfant Plaza, SW, Washington DC. My office is responsible for negotiating5and administering collective bargaining agreements with the National Association6of Letter Carriers, AFL-CIO (NALC), and the Postal Police Officers Association. I7am also responsible for national oversight of postal labor relations policies and8programs.9I have been employed by the Postal Service since 1978 and in various10positions involving labor relations since 1988. I have worked at Postal Service11headquarters since 2002. On behalf of the Postal Service, I participated in12collective bargaining with the NALC during the negotiations that culminated in the132001 and 2006 national collective bargaining agreements.1415I received a Bachelor of Science degree in Human ResourcesManagement from Strayer University, Alexandria, Virginia.
30921I.2Purpose and Scope of TestimonyThe purpose of my testimony is to rebut the testimony of National3Association of Letter Carriers witness William Young (NALC-T-2) insofar as it4implies that the Postal Service failed to pursue an offer made during the 20065collective bargaining negotiations to achieve significant carrier cost savings.67891011II.The 2006 USPS-NALC Agreement Achieved Significant SavingsAnd Workforce FlexibilityDuring the collective bargaining negotiations that led to the current12National Agreement between the United States Postal Service and the National13Association of Letter Carriers, AFL-CIO (NALC), I served as a member of the14bargaining team, attended alImain table sessions, and was responsible for15ohairing a subcommittee.16NALC witness William Young testifies that during the bargaining sessions17leading to that agreement, the NALC made an offer to the Postal Service that18included a ‘package of proposed savings,” including a separate workforce of19letter carriers to deliver mail on Saturdays, made up of retirees and new hires.20NALC-T-2 at 1; Tr. Vol. VIII at 297.21Just so the record is clear, the Commission should understand that the22NALC’s on-the-record proposal for a new Saturday workforce included the23following conditions:24
309312345678910(1) conversion of all city letter carriers to an all regular, full-time, Mondaythrough Friday workforce (regardless of office size), (2) establishment of“Saturday Carriers,” for which retired city carriers would have preference,with Saturday Carriers to be covered by the collective bargainingagreement with limited exceptions appropriate to their status, (3) USPSand NALC to seek approval from QPM for an “early out” voluntary earlyretirement, and (4) prohibition against subcontracting any city letter carrierwork.The parties did not reach agreement on this NALC proposal. Instead, the Postal11Service was able to achieve cost savings and greater carrier workforce flexibility12through increased ability to utilize Transitional Employees with the 2006 National13Agreement. The agreement on Transitional Employees was at least as valuable14to the Postal Service as the NALC’s proposal.2
3094Declaration of Alan S. MooreI, Alan S. Moore, hereby affirm under penalty of perjury that my PostalRegulatory Commission Docket No. N2010-1 surrebuttal testimony (USPS-RT-2)filed with the Commission is true and accurate to the best of my knowledge,information and belief, and that if I were to appear before the Commission today,it would be for the purpose of providing that s AIfr’S?MooreOctober4, 2010e testimony orally.
30951MR. TIDWELL:Madam Chairman, the Postal2Service also has two copies of the Surrebuttal3Testimony of Samuel Pulcrano on behalf of the United4States Postal Service, and has been designated as5USPS-RT-4.6signed by Mr. Pulcrano attesting to the testimony7under penalty of perjury.8move that it be admitted into evidenced as well.9Attached to each copy is a declarationCHAIRMAN10The Postal Service wouldGOLDWAY:Are there any objections?Hearing none, the testimony of Samuel11Pulcrano is received into evidence and should be12transcribed.Thank you.13(The document referred to was14marked for identification as15USPS-RT-4 and was received in16evidence.)171819202122232425/////////1Heritage Reporting Corporation(202)628-4888
3096USPS-RT-4BEFORE THEPOSTAL REGULATORY COMMISSIONWASHINGTON, D.C. 20268-0001SIX-DAY TO FIVE-DAY CARRIER DELIVERYAND RELATED SERVICE CHANGES, 2010Docket No. N2010-1SURREBUTTAL TESTIMONY OFSAMUEL PULCRANOON BEHALF OF THEUNITED STATES POSTAL SERVICE
30971Autobiographical Sketch2My name is Samuel M. Puicrano. I am the Vice President of Sustainability3for the United States Postal Service. I submitted direct testimony (USPS-T-1)4that accompanied the Request filed by the United States Postal Service in this5docket.678910111213141516171819202122
30981I.2Purpose and Scope of TestimonyThe purpose of this testimony is to rebut two specific assertions in the3testimony of National Newspaper Association witness Maxwell Heath (NNA-T-1).4First, I address Mr. Heath’s characterization (reflected in Transcript Volume X at5pages 2921 and 2954-57) of Postal Service communications to the mailing6industry regarding the respective roles played by Congress and the Commission7affecting the Postal Service’s proposal to implement five-day delivery. Second, I8present information responsive to Mr. Heath’s claim (at Tr. Vol. 2958-60) that, in9premature anticipation of five-day delivery’s implementation, the Shelbyville KY10Post Office has sought to impose improper mail acceptance conditions on a local11publisher.1213141516171819USPS Library Reference N2010-1/20 is associated with my testimony andis incorporated by reference herein.II.Postal Service Consultations With The Mailing Industry RegardingFive-Day Delivery Have Emphasized The Important Roles OfCongress And The CommissionAs the postal executive charged with managing development of the20operational concept and service change proposals under review in this docket, a21primary responsibility of mine has been to direct the outreach performed by the22Postal Service to the mailing industry. To that end, I have been responsible for23the preparation of information for presentation by postal management in24meetings attended by commercial, non-profit and government bulk mailers and25bulk mail recipients, as well as mailing industry trade representatives, postal1
309912union representatives, Congressional staff members, and representatives of theE3 oytrnmQn - f Accountability Office. To ensure consistency of messaging, I have used3standard decks of PowerPoint slides as the basis for each of the numerous oral4presentations I have made. In conjunction with my rebuttal testimony, the Postal5Service has filed USPS Library Reference N2010-1/20. Tabs A and B of that6document contain illustrative pairs of such PowerPoint slide decks used in7communications about five-day delivery in 2009 and 2010: I used these slide8decks as the foundation for oral presentations to a broad range of stakeholder9audiences --from large mailer groups to very small audiences, such as the10management team of a single printer, publisher or remittance processor, or the11executive officers of a postal employee union, or a group of Congressional staff12members. During such presentations, my consistent practice has been to13present the slides to my audience, orally discuss the matters highlighted on each14slide, and then take questions either during or after each presentation.15The August 13, 2009 MTAC “Strategic Day” PowerPoint presentation in16Tab A of USPS Library Reference 20 was prepared during the development of17the five-day concept and served as the basis for a presentation to the Mailers18Technical Advisory Committee and various other audiences during that general19time frame. Slide 10 of that presentation clearly emphasizes how critical the20respective roles of Congress and the Commission are to any postal plan21eliminating Saturday street delivery.1 The same is true of Slides 5 and 48 of the22April 2010 Five Day Delivery Briefing PowerPoint presentation that I gave at theTab C of USPS Library Reference 20 consists of a copy of an August 16, 2009 e-mail messagesent by witness Heath to me confirming his attendance at my MTAC presentation. See also Tr.Vol. X at 2921.2
31001National Postal Forum in Nashville TN shortly after the Request in this docket2was filed. See Tab B of3USPS Library Reference 20.Under my direction and contemporaneously with the filing of the Request,4the Postal Service launched a micro-website to provide interested stakeholders5with a ready source of information regarding the service changes currently under6review. The following Internet links identify specific website pages that address7directly the respective roles of Congress and the Commission in five-day8delivery: ivery/atacjlance.htm liverq/regfilinp.htm.11As this testimony is filed, we remain uncertain whether the FY 2010 five-day12delivery legislative prohibition will be followed by a similar FY 2011 prohibition.13On the assumption that implementing five-day delivery some timeduring FY142011 will be tolerated legislatively, the Postal Service has exercised its discretion15to wait until after the receipt of an advisory opinion from the Commission in this16docket before determining whether to implement the service changes that17opinion will address. I have affirmatively made this clear as a standard part of18the numerous presentations I have given to the many audiences. It would be fair19to characterize senior postal management as committed to pursuit of the service20changes under review in this docket as necessary, if not inevitable, components21of a strategy for closing the expected long-term gap between postal costs and22revenues, and improving the financial stability of the Postal Service.23Nevertheless, our communications to the mailing industry and the general3
31011mailing public have consistently emphasized the critical roles played by2Congress and Commission, and have shown appropriate deference to Congress’3ability to pre-empt a change to five-day street delivery. Library Reference 204refutes the claim at page 2921 of Tr. Vol. X that virtually every mailing industry5briefing talked in terms of “when” rather than “if.” That Library Reference also6refutes the claim at page 2921 that I acknowledged the roles of Congress and7the Commission only when someone in the audience like witness Heath “pointed8out that Congress had to make a decision.” It puzzles me why such claims would9be made when the Postal Service has consistently emphasized to the mailing1011121314isindustry the critical roles that the Congress and Commission play.III.Mail Acceptance Conditions Implemented By The Shelbyville KYPost Office Are Unrelated To The Prospect of Five-Day DeliveryDuring oral cross-examination, NNA witness Heath embellished his claim16that the Postal Service regards the service changes under review in this docket17as a fait accompli by accusing the Shelbyville KY Post Qifice of having imposed18mail acceptance conditions on a local newspaper publisher in anticipation of a19formal determination to implement those changes. Tr. Vol. X at 2958-60. At my20direction, a copy of witness Heath’s testimony was forwarded to the Shelbyville21KY Post Office and the Kentuckiana District Office to which it reports. Again,22what emerges is a considerable gap between witness Heath’s testimony and the23proverbial “facts on the ground.”2425It is important to emphasize that no local postal managers have beenauthorized to implement or test any aspect of the service changes under review4
3102Iin this docket. Neither the Kentuckiana District office nor the Shelbyville Post2Office has received instructions related to the implementation of any service or3operational changes currently under review in this docket, as no such instructions4have been disseminated. After reviewing witness Heath’s testimony, the District5and Post Office management teams have asked me to make clear that, contrary6to his assertion they have taken no action or communicated to any customer7any plan to take action in connection with the service changes currently being8reviewed. On behalf of those managers, lam submitting the attached9correspondence between local postal managers and representatives of the,10publisher in question for the Commission’s review. It is only fair to the District11and Post Office management teams, who have been maligned by witness12Heath’s testimony, that these documents be made a part of this docket’s record.13The attached correspondence unambiguously sho that the matter involving14witness Heath’s hometown Shelbyville KY Post Office and newspaper publisher15is a mail acceptance Sarbanes—Oxley compliance issue and, contrary to the16accusation of witness Heath, is not an imposition of conditions that bear any17relation to the service changes under review in this docket. I will leave to the18Commission any conclusions as to why there would be such a wide variance19between the facts20testimony.—as revealed in these documentsS—and witness Heath’s
3103USPS-RT-4 AttachmentPage 1MANAGER, Post Office OperationsKENTUCKIANA DISTRICTr2POSTAL SERVICEApril23, 2010LandmarkATTN: DianeP0 Box 549Shelbyville, KY 40066-0549Dear Diane,The mission of The Postal ServiceTM is set forth in the opening paragraph of the 1970 PostalReorganization Act: “The Postal ServiceTM shall have as its basic fbnction the obligation to providepostal services to bind the Nation together through the personal, educational, literary, and businesscorrespondence of the people. It shall provide prompt, reliable, and efficient services to patrons inall areas and shall render postal services to all communities.”This fbndamental mission has not changed and today is supported by a vision statement that ThePostal ServiceTM products and services will be recognized as the best value in America; that ThePostal ServiceTM will evolve into a premier provider of 2l century postal communications; and thatThe Postal ServiceTM will be the most effective and productive service in the Federal Governmentand markets that it serves. The organization defines its guiding principles—or values—as “People,Customers, Excellence, Integrity, and Community Responsibility.”The Postal ServieeTM is constantly changing, but its mission remains the same to DELIVER THEMAIL promptly, efficiently, and accurately, and to do so in a friendly manner. Today, the postaltbncti
15 Management from Strayer University, Alexandria, Virginia. 3092 1 I. Purpose and Scope of Testimony 2 The purpose of my testimony is to rebut the testimony of National 3 Association of Lette
