August 13, 2019
We hope that the August 9 meeting was the last of the USPS Temporary Emergency Committee (TEC). At it, the Postal Service reported flat revenue of $17.1 billion for the third quarter of Fiscal Year 2019, but total operation revenue of $19.3 billion, up 4.3 percent, causing a loss of nearly $2.3 billion. When they exclude non-operational, uncontrollable expense factors, USPS reported a loss of $1.1 billion for the quarter, with expenses up 1.2 percent.
Postmaster General Megan Brennan emphasized how hard the Postal Service is working within very tight constraints to make the agency successful:
“We continue to face imbalances in our business model that must be fixed through legislative and regulatory change. As we work to effectuate that change, we continue our ongoing aggressive management actions, and remain focused on delivering for the American public, and meeting their evolving business and residential needs. We are actively adapting to changes throughout the mailing and shipping landscape, providing customers with new solutions that add value for their investment, improve the service we provide, and drive internal efficiencies.”
Chief Financial Officer and Executive Vice President Officer Joseph Corbett remarked on Postal Service efforts to increase efficiency:
“We continue to focus on maximizing productivity. While many of our network costs are fixed to meet our universal service obligations, we reduced work hours by approximately 1.7 million relatives to the same quarter last year.”
The meeting was still held as a TEC because the new Governors confirmed a week before had not yet been sworn in. The two incumbent Governors expressed great relief at the advent of new Governors. They also explained that the long-anticipated USPS ten-year plan is awaiting input and buy-in by the new members.
We reported earlier about the Senate confirmation of three new Governors appointed by President Trump to the Postal Service. That brings the number of Governors to five (of a possible nine) and the Board of Governors (that includes the Postmaster General and Deputy Postmaster General) to seven (of a possible eleven). The Board of Governors is required by law to have a minimum quorum of six to perform its duties. So, the Board has a quorum for the first time since 2014. We are really hopeful that this will bring some action to reforming the Postal Service.
It is important to distinguish that in two of the most important acts of leadership, the majority of Governors with no quorum requirement decides. These are: (a) the selection of a Postmaster General and (f) the setting of rates. The relevant section of Title 39 reads:
As provided by 39 U.S.C. 205(c), and except for routine, non-controversial, and administrative matters considered through the notation voting process described in § 6.7, the Board acts by resolution upon a majority vote of those members who attend a meeting in person or by teleconference. No proxies are allowed in any vote of the members of the Board. Any 6 members constitute a quorum for the transaction of business by the Board, except:
(a) In the appointment or removal of the Postmaster General, and in setting the compensation and benefits of the Postmaster General and Deputy Postmaster General, 39 U.S.C. 205(c)(1) requires a favorable vote of an absolute majority of the Governors in office;
(b) In the appointment or removal of the Deputy Postmaster General, 39 U.S.C. 205(c)(2) requires a favorable vote of an absolute majority of the Governors in office and the Postmaster General;
(c) In the appointment, removal, or in the setting of the compensation and benefits of the Secretary, Assistant Secretary, or other necessary staff, a favorable vote of an absolute majority of the Governors in office is required;
(d) In the determination to close a portion of a meeting or to withhold information concerning a meeting, 5 U.S.C. 552b(d)(1) requires a vote of a majority of the entire membership of the Board; and
(e) In the decision to call a meeting with less than a week’s notice, 5 U.S.C. 552b(e)(1) requires a vote of a majority of the members of the Board. In the decision to change the subject matter of a meeting, or the determination to open or close a meeting, 5 U.S.C. 552b(e)(2) requires a vote of a majority of the entire membership of the Board.
(f) In establishing rates or classes of competitive products of both general and not of general applicability in §§ 3.9 and 3.10 of these bylaws, 39 U.S.C. 3632(a) requires the concurrence of a majority of all of the Governors then holding office.
(g) In removing the Inspector General for cause, 39 U.S.C. 202(e) requires the written concurrence of at least 7 Governors.
[73 FR 78983, Dec. 24, 2008, as amended at 77 FR 17334, Mar. 26, 2012]
Postmaster General Brennan has spoken frequently and forcefully about the importance of a strong Board of Governors to lead the Postal Service into the future. For example, on September 11, 2018 she said:
“The public interest and the Postal Service are best served by a fully constituted Board made up of well-qualified individuals with diverse perspectives and experience. Powers of the Board of Governors necessary for continuity of operations will continue to be delegated to the Temporary Emergency Committee (TEC) until the Board once again has a statutory quorum.”