you should cease offering testimony let me offer some brief introductions although many of the members on this panel have been frequent  witnesses let me begin mister william burrus is the president of the american postal workers union mister john hegarty is president of the national postal mail handlers union mister louis atkins is executive vice president of the national association of executive vice president of the national league of postmasters of the united states welcome all i welcome you to make an opening statement you have five minutes return to previous heights until very recently postal executives have asserted that the decline in volume was caused by the conversion of hard copy mail to electronic communications i have long been skeptical of that claim that individual consumers increased use of email and the internet has placed the postal service in jeopardy it is imperative that postal decisionmakers correctly identify the cause of the reduction in  to increase or decrease i have concluded that the decline in hard copy and communications has been less affected by electronic conversion than by the nation's economic downturn the facts are it is important to our nation's mail volume was highest in two thousand and six when the use of electronic communication was already widespread we must also keep in mind that the mail stream is and will continue to be dominated by business related communications which is especially sensitive to the economic environment analysts generally separate mail into household mail and non household mail and review the interactions between these groups in two thousand and six of the two hundred and thirteen billion mail pieces one hundred and ninety billion involved non household communications only two point nine percent or nineteen point four billion pieces constituted household to household mail the business community has explored other means of communications and will continue to do so but these marketing decisions go far beyond the evolution of personal communications to date there is no general agreement among analysts about the future of commercial messages television radio newspaper email and online advertising are all receiving mix predicts that between now and two thousand and fourteen mail will grow two percent annually yet postal management is betting that mail will cease to be relevant i disagree mail has unique advantages o other commercial messaging including targeting attention and retention i predict that hard copy mail will be competitive far into the future i admit i have no crystal ball but neither does the unquestionably have a negative effect on the postal monopoly and will impede the postal service's ability to compete these are acts of surrender when the outcome of the battle is still in doubt nonetheless the post service's current financial predicament major mailer associations management associations the postmaster general the board of governors some labor organizations and some members of congress have through their support of the financial debacle and the drastic actions undertaken in response i have been consulted by postal management on the subject affecting service and the impact on my members on the closing of stations and branches i reminded postal hegarty good morning and thank you chairman lynch ranking member chaffetz and the other members of the subcommittee for inviting me to testify here today let me take this opportunity to thank you and all members of the subcommittee for your diligent efforts on h r twenty two we look forward to working with you as that legislation and the recently introduced senate bill s one thousand five hundred and seven work their way through the legislative process as requested my testimony today will focus on the current  of the postal service dealing with the closing and consolidation of facilities and the realigning of stations and branches i will also discuss the impact of such decisions on the flow of current and future mail and the resulting impact on mail handlers postal customers and communities as you know mail handlers work primarily at the large processing facilities at the same time however we represent approximately one thousand mail handlers who are situated at the larger stations and branches while they may be employed at smaller facilities some of these mail handlers actually are assigned to a larger facility as part of their postal installation as we have previously discussed the postal service is proceeding to realign its network of mail processing plants by conducting area mail processing studies i will not repeat prior testimony here but i think i should note that as i have said in prior testimony our concern is a that the process is accomplished uniformly and within the established guidelines and b that the future postal network is not cut too severely such that the postal service will not be prepared to provide universal service and low cost service when mail volumes recover  solution to a rational closing and consolidation approach is to review such changes on a case by case basis following a careful analysis of the facts presented in each situation where the proposal makes economic and logistical sense where service standards will not be negatively affected where major mailers in the area will not be inconvenienced where all negotiated requirements with the unions have been complied with then the mail handlers union will not simply oppose a closing or consolidation simply for the sake of opposition conversely the postal service should not be closing and consolidating facilities just so the agency can say that it is closing and consolidating the impact on mail handlers is varied depending on the circumstances but some of the affected employees have had their hours of work or work location drastically altered thereby severely disrupting their family life employees have had to scramble to make alternate child care arrangements to get their kids to school or their spouses have had to adjust their work schedules to juggle the various responsibilities many employees have been faced with the almost impossible task of either moving their families hundreds of miles away to remain employed by the postal service or to give up their postal careers altogether and i think you highlighted that in your opening statement mister chairman outlining the situation that we talked about at the last hearing where employees were offered jobs some of them four hundred miles away from their current duty station the impact on the customers will also vary depending on the circumstances our concern is that we may end up losing business because a major customer decides it just as easy to use a competitor and they abandon the postal service altogether we also need to factor in the individual customers who need and deserve access to postal services the impact on communities should also be factored into any final decisions on consolidation what will be the impact if a large plant is closed and the employees then are moved to another plant to work in some other community how about local businesses like restaurants and other retail establishments who used to cater to this large factory that employed so many people many of the other topics on which the subcommittee is seeking input really need to be answered by the postal service before we can weigh in on them but as always i would be happy to answer any questions that you might have and again thank you for inviting me to testify national association of postal supervisors we are recognized by the u s postal service as representing over thirty five thousand current and retired management employees of the postal service i am honored by your invitation to appear before you and to provide  organization's feedback on the postal service's plan to examine the potential closure or consolidation of many postal stations and branches that comprise the national retail network over the years the postal service has continually made minor thousand one hundred facilities across the country some in your own congressional districts will significantly impact our customers and your constituents we have concerns and reservations about the underlying review process and its likely result highly developed suburban communities no matter where you go across the country postal service retail operations are a business anchored to the communities they serve businesses that share the general location with the postal service benefit from the postal service retail serve urban and highly developed communities the repercussions of a move that large could be modest in terms of dollar savings and considerably negative from a customer service standpoint let me explain why since the targeted facilities and operations are in urban areas and developed suburban communities many residents rely on their local post office as being within walking distance especially those who are elderly or without a car today many of our customers in urban areas enjoy the convenience of walking to their local post office to conduct their postal related business if the postal service's plans are implemented these customers will face a distance to the nearest post office that will be greater than the would not likely be able to walk the elderly who are less likely to connect to the internet rely more heavily on their local post office retail unit and will feel a greater loss of convenience and connection to their post office facility will mean that the portion of the building devoted to carrier floor space will become vacant and only the curbside potion of the building devoted to retail operations will continue to be used should the post office determine that it is best to separate the retail and carrier operations in their present location keeping only the retail operation in place will not necessarily present savings if the post office is leasing the facility and obliged to continue to pay a long term lease for the facilities operated by the postal service and the underlying and substantial long term financial obligations they represent it would be difficult for the postal service to achieve significant savings through the consolidation or closing of its leased properties where the postal service owns the real estate that houses its carriers and retail operations the consolidation or closure of delivery or retail operations at those properties may also be problematic when the sale of that property is attempted given today's ranking member chaffetz and other distinguished members of the subcommittee ms norton my name is fred rolando i am the president of the national association of letter carriers which represents more than three hundred thousand active and retired letter carriers nationwide thank you for inviting me to testify i have seen the postal service thrive and i have seen it struggle through some very difficult times but i have never seen a crisis like the one we are facing now volume is expected to drop by thirty billion pieces this year the worst decline since the 's when you couple the economic crisis with the grossly unfair policy advanced by the previous administration to require the postal service to pre fund a massive seventy five year liability for future retiree health benefits over just a ten year period it should come as no surprise that the postal service faces a crisis of its own the postal service is responding with service cuts and downsizing its branch and station optimization program and the five day delivery study are part of that response as congress reviews these developments it should ensure that the postal service does not make structural decisions that will do more harm than good over the long run downsizing to meet depression level demand without considering the long term impacts on the ability of the postal service to meet new demands when the economy recovers would be shortsighted short term savings that undermine the postal service's capacity to offer new services and to take advantage of future growth opportunities would be self defeating nalc has a long history of working with the postal service to improve efficiency and to adjust to change and we have continued that tradition in this crisis we developed a special expedited route adjustment process to help the postal service adjust to the fluctuating mail volume these adjustments along with the initiatives for flat sequencing systems have reduced the number of city carriers by more than eleven thousand during the past year and will save the postal service billions of dollars over time looking ahead it will be just as important to boost postal revenues as it will be to reduce costs we believe the uses of our unmatched delivery network could be expanded to provide a whole range of valuable services like the one proposed by the leaders on this subcommittee to use letter carriers to conduct the next census that is why we must be careful with branch and station consolidations and reject drastic proposals like the elimination of saturday delivery the cost of lost opportunities from service cuts and other operational changes must be recognized the postal service and its employees are doing all that they can to respond to this crisis but congress can also help to both minimize the short term pain of the recession for the postal service its employees and customers and to maximize the long term potential of the postal service it can do so by reforming the retiree health pre funding provisions in the law the current schedule of pre funding payments is unaffordable and unreasonable moreover the actuarial methods adopted by opm to implement the pre funding policy discriminate against the postal service and significantly increase its costs while both h r twenty two and the legislation developed by the office of management and budget offer similar short term relief for the postal service and while we have given our support to both proposals they simply do not provide a long term solution comprehensive reform is needed to address the postal service's financial situation and future viability overhauling the pre funding policy and reforming opm's policies with respect to the postal service must be a part of this reform if the postal service is to continue to provide affordable universal postal service the postal service is the nation's oldest and most trusted government agency it would be a tragedy to sacrifice its future viability because of unfair and questionable policy decisions made by opm that are fossilized into current law because cbo scoring rules prevent their reconsideration my members hope that this subcommittee and the full house representatives will not let this happen i want to thank you for this opportunity to testify it is my first time i hope it is not my last time and i would be happy to answer any questions mister lynch i don't think you have to worry about this being your last time carriers our members work in rural suburban and urban areas throughout the united states and function as a post office on wheels because rural letter carriers offer postal customers all of the services performed over the counter at a post office mister chairman first and foremost i would like to thank you and representatives john mchugh and danny davis for your leadership on h r twenty two i would also like to thank the chairman of the full committee representative ed towns for his dedication in getting this important legislation passed at the full committee level while h r twenty two will not solve all the postal service's problems during this financial crisis it is a step in the right direction we are living in  challenging time our country is in a deep recession and the postal service is a bellwether of the nation's economic well being mail volume is down eleven point nine percent in the first half of this year and the postal service is expecting to lose approximately seven dollars billion the decline in mail volume has hit the rural carrier craft extremely hard rural carrier pay is based on the evaluated compensation system which is unique not just to the postal service but to american industry in general in our evaluated compensation system each rural carrier is paid an annual salary based upon the estimated amount of time it will take to deliver the mail on his or her individual route th the individual route is based upon an annual mail count whereby over thirty separate elements are counted timed or measured the most recent mail count earlier this year was devastating to our members for the second straight year our members have been hit hard in the pocketbook the average rural route lost just over two hours of valuation per route which equates to more than three thousand four hundred dollars a year in annual salary as a result of this year's mail count rural routes were reevaluated and adjusted prior to the two thousand and nine mail count over forty two thousand rural carriers delivered on routes ten out of the twelve days each pay period after the mail count the number of r carriers who delivered this kind of route dropped to just over twenty seven thousand meanwhile the number of carriers who delivered eleven out of the twelve days each pay period and still others who delivered twelve out of the twelve days each pay period increased significantly in order to avoid significant salary reductions thousands of rural carriers opted to work an extra day just to keep the same salary they were making prior to the mail count the annual mail count directly affects rural carrier salaries and schedule but there are other concerns we have about our very livelihood if the postal service were to consolidate the operation of retail stations and branches into nearby postal facilities that would only compound what has for rural carriers over the last several years become a serious problem if post offices begin to disappear our carriers will have to travel greater distances to work and our customers will increasingly feel isolated from the postal service during these economic times paying close attention to customer service is a key and we would expect a public outcry if post office stations and branches across the country are closed customers especially in rural areas will be particularly inconvenienced and some will unfortunately decide it is simply not worth doing business with the postal service we will be sending the wrong message if offices across the country begin to close their doors our customers  communities need to know that the postal service is here to stay i would like to say a few words about the postal service's interest in reducing postal service delivery days instituting five day delivery would likely mean further salary decreases for thousands of carriers not to mention massive job losses it could mean salary cuts and layoffs for workers employed by businesses in the mailing community if five day delivery were implemented our evaluated compensation system which is often praised by the postal service for its efficiencies would need to be re engineered and the rural craft could lose fifty thousand rural carrier associate jobs mister chairman that is fifty thousand jobs added to the national unemployment rate of almost ten percent and that is just from one of the four postal unions mister chairman i know that times and finances are tough right now but in my opinion moving from six to five day delivery would not save the postal service it would only hurt the business model and make other delivery operations more attractive to our customers it so desperately needs to attract and retain this would be a terrible course to chart and as many observers have noted could very well do much more harm than good thank you for allowing me the opportunity to testify before the subcommittee today i would be happy to answer any questions you or your fellow members may have representing the interests of tens of thousands of postmasters throughout the united states my name is mark strong and i am the executive vice president of the league more importantly i am a level twenty four postmaster in sun city az an unincorporated area in the phoenix metropolitan area i have served in that capacity since one thousand nine hundred and ninety two the league would like to thank the subcommittee and the full committee for reporting h r twenty two without amendment the action has operated as a catalyst and started the legislative ball rolling with your permission chairman i would like to request that my written testimony be entered into the record and proceed to briefly summarize my testimony mister lynch without objection mister strong a post office and its station and branches has a primary responsibility in a given geographic area for collection delivery and some processing in addition post offices and their stations branches and finance units serve a vital function as a network to access points retail sales points and final delivery points for post office box holders a key element of our customer base the league strongly supports consolidation of collection delivery and processing functions where appropriate we are quite concerned however that panicked consolidations could lead to consolidating functions in a way that would cost rather than save the postal service money or negatively affect service there is often a good reason why carriers are disbursed throughout a community at stations and branches and this reason has to do with urban congestion and traffic rather than looking at my communities if the carriers from one of my branches were consolidated to another branch or my main post office the heavy traffic in the phoenix metropolitan area would add almost an hour additional time per day to each carrier route i would have to compensate for that time or service would suffer and to compensate for that is expensive this has to be taken into account there are also questions of sufficient space in a given facility to take new carriers into that  facility in my case i don't have any to spare in terms of space i have been adding in my post office almost eight hundred deliveries per month for years which means i have been adding carriers that number has decreased significantly over the past few years and it is now at about eighty new delivery points per month however last month there were more building permits issued in my area than were issued in the prior twelve months put together thus i anticipate that my eighty new delivery points per month will start to grow quite rapidly in the not too distant future i have to start thinking about that now which puts me in an expansion mode not a contraction mode while the league supports the notion of consolidating carrier function it has more fundamental concerns about consolidating retail functions service has to be our prime consideration when looking to the future without good service we have nothing to offer having many retail outlets in the communities allows us to provide better service and closing any significant number of them will hurt service and we can't do that the strongest argument for caution in consolidating retail facilities lies in the area of post office boxes today the reality of carrier delivery is that businesses tend to get their mail very late in the day far too late to process and deposit checks the day they are received as businesses have complained about this for years we have told them that the answer to their problem is to rent post office boxes where mail is available no later than eleven a m by renting a post office box small businesses can pick up their mail process their checks and deposit them the very same day at the local bank with a minimum of hassle this is a widespread practice and the quick access to checks that post office boxes provide plays a central role in the financial health to hundreds of thousands of small businesses across the country removing quick access could have a devastating effect on our business customers and their float time means money for our customers and it is up to us to serve them not to have them serve us there also a fundamental question of how we can consolidate one set of boxes from one post office into another generally there simply isn't sufficient room in the second post office to accept the boxes from the first unless more boxes are built in the second office building more boxes would tend to create traffic problems in the second post office since most of these post offices were constructed with a formula for parking that took into account the number of existing boxes we are the postal service and service does not mean forcing  customer to drive five miles in urban traffic to pick up one piece of mail to encounter a five minute wait to park and then a twenty minute wait inside in conclusion i do not want to suggest that no consolidation of carrier and retail functions could occur intelligent consolidation is also a good idea however efficiency service and the needs of the local small business and our customers must come first and that determination should be a local one thank you for considering our views and i would be you what i would suggest is that i could rather than have you stay here for several hours waiting for us to come back and get in another hearing room i could submit these questions to you in writing but i would have to have them back in ten days in order to get the questions and answers on the record if there is not an objection from you then i would like to handle it that way the other opportunity would be to bifurcate the hearing and call you in on another date and ask you that the congressional research service crs report post office and retail postal facility closures overview and issues for congress dated july twenty three two thousand and nine was in the record if it has not already been included i at right here is not only the consolidation of postal facilities stations and branches we are also trying to get a sense of what is involved and what the impact of  i guess in the urban sense and then in the rural sense what it means and how the route consolidation process has gone whether or not you have been actively approached by the postal service to participate and to have your input how has that all gone mister rolando mister rolando thank you with respect to the consolidation we haven't been approached regarding the adjustment of routes but we have been involved in the joint process of adjusting the routes anyway due to the fluctuating volume we have been working with the postal service for a couple of years to find a more efficient way to jointly adjust our routes which of course has been  drop in volume traditionally we have had volume growth as we started our studies from our collective bargaining agreement we had to pretty much stop in our tracks and find a way to adjust to the falling volume the idea of course is the efficiency and having eight hours work for eight hours pay so we have been working together we are in our second of third rounds to do that to adjust to the volume we are doing two this year i can tell you with any consolidations that do occur it would just be an extension of what we are doing to adjust the routes obviously it would career status and that reduced the number but contractually we are entitled to a leave replacement for each route which makes it a little more difficult for them to put a freeze on hiring mister lynch well let me ask you basically the same question i know  have seen carriers move from one office to another because we had several calls complaining i don't know if the office was necessarily closed but the delivery function was consolidated and they are driving considerably longer just to get to work and then to go back drive that same distance to go out and deliver their route so we are not completely immune to it although we haven't seen or even been asked about some of the more urban offices that we have and what kind of effect we would have as whether it is going up or down our routes are adjusted accordingly we actually have a cap on how large the routes can grow which when they exceed that they would be adjusted we don't have much of a bottom end and that is why in my testimony we have a lot of carriers now working all twelve days during a pay period because their routes have dropped below forty hours we don't have a guarantee it is by the actual volume and what the count shows that the route would be so we will have some thirty six thirty seven hour routes and we have gone through those adjustments for years and years so it is really not anything new for us what is new is because of the drop in volume we are seeing more consolidation of  the employee representatives of the unions before us because it is clear that you have done what you could and what you can to pitch in and i think it is a perfect example of why unionization is a benefit to the public as well as to management you have orderly process going on here could i ask if any of you have experienced layoffs straight out layoffs so far  all of our contracts contain provisions governing layoff of employees in one thousand nine hundred and seventy eight a national arbitrator when all the parties were negotiating jointly at the time  imposed conditions that we all share equally regarding layoffs in our bargaining units an employee that achieves six years of continuous service is protected for a lifetime against  the rif procedures with the layoff procedures because the employees with less than six years of service who are veterans have a special process that must be used in order to effectuate layoffs so it would be a very complicated process employees who have no fixed schedules and no guarantee of work hours in many areas of the country now they are only working four hours a pay period which is two hours a week so they are in effect laid off  glad to have this on the record is because i am most concerned about some kind of orderly process i expressed earlier the kind of surprise notion precipitous layoffs or for that matter precipitous transfers  same difference as far as i am concerned i have looked closely at this five day week largely because it is one of the few things i think the public is not going to throw their hands up at you can bet if some of those post offices or branches in the district of columbia have to be closed i am going to be besieged with people saying oh please whatever you do don't close that postal service so i was interested that people have already acclimated themselves to the you are pretty clear you did not want to see that happen i agree with mister burrus that watch out for calling the decline and fall altogether of the post office constitutional post office nobody up here the post office allegiance up here that nothing else i know has nevertheless just as you warn about structural changes there are structural changes occurring to you and yet very little of what we have heard at least until today involved structural responses right back mister hegarty went through a list that interested me because he said case by case basis facts in each situation economic and logistical sense are aging out because they can retire and the rest and given mister hegarty's list or a similar list would you really think the five day week should be off the table when hurt one way or the other and the question is can there be some kind of a sense of how to get hurt the least mister rolando i am going to be looking for advice from people on the ground employee buy in than to have what we are seeing the post office do now they come each time with oops we have to do this as if they couldn't have seen that three years ago or four or five years ago so that is what i putting to you if that one is not something we can agree upon it is going to be hard for me to understand what it is that we can get some kind of consensus on to happen in time to save what is the core and route of the ser wait the greater the damage and the more management is empowered to make the decisions i would like to see the kind of collaboration that you have already begun to try to save the postal service i don't think it can be saved except with employee collaboration you have in place such a strong collective bargaining system they are going to have to come to you you can delay the thing and the question is how to preserve what you