Chapter 1 Compliance with Statutory Policies

Postage offerings. A redesigned Postal Store Web site on usps.com provides customers with a single entry point for purchasing stamps and retail products and ordering shipping supplies. The Web also made it easier to conduct commercial mailings. With a new Postage Statement Wizard, customers can send their postage statements straight from their workstation.

The Postal Service kept up a “dialog” with residential and business customers through direct mail postcards. These cards featured comic strip characters “Dilbert” and “Cathy” and provided information about a variety of products and services, from flat-rate packaging to postal money orders to online change of address. This proved to be an extremely effective advertising campaign, credited with raising awareness of these services by 28%.

Efforts to make employee transactions quick, easy, and convenient were also a major focus. The Postal Service is replacing outdated human resources technology with a fully integrated system to streamline and automate personnel transactions. Once fully implemented, the new Human Capital Enterprise System (HCES), which is the technology behind the PostalPEOPLE project, will be the largest of its kind anywhere.

2. Board of Governors

As the governing body of the U.S. Postal Service, the 11-member Board of Governors has responsibilities comparable to the board of directors of a publicly held corporation. The Board includes nine Governors appointed by the President of the United States with the advice and consent of the Senate. The other two members are the Postmaster General and the Deputy Postmaster General. The Governors appoint the Postmaster General, who serves at the pleasure of the Board, without a specific term of office. The Governors, together with the Postmaster General, appoint the Deputy Postmaster General. The Chairman and Vice Chairman are elected each January. The Board directs and establishes policies, basic objectives, and long-range goals for the Postal Service in accordance with Title 39 of the United States Code. Except for those powers specifically vested in the Governors, the Board may delegate the authority vested in it by statute to the Postmaster General under such terms, conditions, and limitations, including the power of re-delegation, as it deems desirable.

The Postal Service fiscal year (FY) 2006 began on October 1, 2005, and ended September 30, 2006. The full Board held meetings each month except in October, April, and August. Meetings consisted of open and closed sessions in accordance with the provisions of the Government in the Sunshine Act. Altogether, the full Board met 14 days. Meetings were held in Washington, D.C., except for June, when the Board traveled to Indianapolis to view delivery operations, see flat sorting sequencing equipment, and meet with employees. In addition to full Board meetings, committee meetings were held throughout the year, some not coincident to the full Board meeting dates. The Board had four standing committees: Audit and Finance, Capital Projects, Compensation and Management Resources, and Governance and Strategic Planning. The committees met to consider matters within their areas of responsibility and referred items to the full Board for consideration.

In November 2005 the Board approved a comprehensive change in international rates and a change in the implementation date for a negotiated service agreement with HSBC North America Holdings Inc. The Governors approved the Postal Rate Commission Opinion and Recommended Decision concerning Changes in Postal Rates and Fees Pursuant to Public Law

108–18, Docket No. R2005-1 with an implementation date of January 8, 2006. The Board also approved the audited 2005 financial statements.

At the December 2005 meeting, the Board approved the 2005 Annual Report and the 2007 appropriation request to Congress. The Board also approved capital funding for Phase 3 of the mail processing infrastructure program.

In January 2006 James C. Miller III was reelected Chairman of the Board and Alan C. Kessler was reelected Vice Chairman. The Board approved the annual report on Government in the Sunshine Act Compliance, a resolution on capital funding, the establishment of a Compensation and Management Resources Committee, and the 2005 Comprehensive Statement on Postal Operations, including the Preliminary Annual Performance Plan for Fiscal Year 2007. The Board also approved capital funding for the Northeast Metro Michigan Processing and Distribution Center, and a filing with the Postal Rate Commission to extend the market test of Repositionable Notes.

In February the Board approved two filings with the Postal Rate Commission: an Advisory Opinion on service changes associated with the Evolutionary Network Development strategy and a negotiated service agreement with Washington Mutual Bank. The Board also approved two capital funding requests: remote encoding and flats sequencing systems and delivery point packaging research and development modification. The Chairman appointed members to the Board committees.

At the March meeting, the Governors approved two Postal Rate Commission Opinions and Recommended Decisions: Repositionable Notes Minor Classification Change, Docket No. MC2006-2, and Parcel Return Service, Docket No. MC2006-1.

In May the Board approved a filing with the Postal Rate Commission for rate adjustments in 2007 including a “forever stamp.” The Board also approved capital funding requests for the following projects: Automated Flat Sorting Machine 100 — Automatic Induction System, Phase 2; additional delivery barcode sorter equipment; and the Oklahoma City local processing and regional distribution center and vehicle maintenance facility.

In June the Board approved a filing with the Postal Rate Commission for changes to the rate discounts associated with the previously filed negotiated service agreement with Washington Mutual Bank.

The Board met in July to discuss legislative issues and strategic planning.

In September the Governors approved two Postal Rate Commission Opinions and Recommended Decisions: Periodicals Nominal Rate Minor Classification Change, Docket No. MC2006-5, and Extension of Capital One Negotiated Service Agreement, Docket No. MC2006-6. The Board approved a bylaw amendment concerning negotiated service agreements. The Governors approved the Office of Inspector General Fiscal Year 2007 Budget. The Board also approved revisions to three of its committees’ charters and the budget for the Office of the Governors. The Governors approved the budget for the Postal Rate Commission for 2007. The Board also approved the Postal Service 2007 operating, capital, and financing plans and two capital funding requests: Automated Package Processing Systems (APPS), Phase 2 and the purchase of an existing leased postal facility in Phoenix, Arizona.