UNITED STATES OF AMERICA
Before The
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
Postal Rate and Fee Changes,
2000
Docket No. R2000-1
)
OFFICE OF THE CONSUMER ADVOCATE
MOTION TO COMPEL RESPONSES
TO OCAAJSPS-TS-27 TO WITNESS TAYMAN AND
OCAIUSPS-81 TO THE POSTAL SERVICE
(March 23, 2000)
The Office of the Consumer
Office of the Consumer
Advocate
Advocate
(“OCA”) interrogatories
witness Tayman and OCAIUSPS-81
the Commission’s
hereby moves to compel responses
OCA/USPS-TS-27
directed to the Postal Service.
Rules 26(d) and 27(d), the interrogatories
and March 6, 2000, respectively,
are attached
to the
directed to
In accordance
filed February
with
23, 2000
hereto together with the Postal Service
objection filed March 10, 2000.
THE REQUEST
Interrogatory
OCA/USPS-TS-27(a)
current USPS FY 2000 Operating
appropriation,
requests
investment
a break-out
requests
from the Postal Service
Plan by accounting
periods for operating
income, expenses and volumes.
of operating
for each of the thirteen accounting
OCA/USPS-TS-27(b)
the most
revenues,
further
revenues by mail class and, subclass cost categories
periods of that plan. OCA/USPSdl
requests the full
Docket No. RZOOO-1
2
detail of the Postal Service’s FY 2000 budget plan (i. e., by Accounting
Period and mail
class and subclass).
The Postal Service
objection
does not distinguish
interrogatories,
although
OCAfUSPS-81.
The former interrogatory
requests
“full detail”
additional
volumes
OCANSPS-TS-27
between
is somewhat
narrower
is limited to operating
such
as appropriations,
investment
or any other detail for each class and subclass
in scope
than
revenue and the latter
of the plan by mail class and subclass,
information
the two different
which
income,
would
include
expenses
that may be covered
and
in the
budget plan.
The Postal Service objections
of the information
to the questions
sought is (a) predecisional,
are limited.
(b) subject to change and (c) of no value
or relevance with regard to issues in this case until finalized.
that it has no objection
to providing
so, it says, in accordance
available
period plans for accounting
change.”
but will be made available
by the Commission’s
Service
period
parlance
has ended
(although
apparently
accounting
periods 7-13 are not finalized
on actual accounting
when the financial
rules,
Although
operating
and the actual
The Postal Service states
period plans” and has done
reporting
period l-6 (now completed)
It says the information
reported
“finalized
with the Commission’s
plans for accounting
rules.
perhaps subject to final audit).
is not yet available
statements
not specifically
are known
accounting
and subject to continuous
information
operating
It has thus made
but “preliminary
required
to be
saying so, in the Postal
plans are only “finalized”
amounts
It asserts that some
after the accounting
and finally
accounted
for
Docket No. R2000-1
3
ARGUMENT
I.
OCA/USPS-T-S(a)
The Postal Service’s
The relevance
three objections
to OCAWSPS-T-S(a)
of the budget plan to an omnibus
several times in the previous rate proceeding,
equally applicable
FY 2000 broken down by into five specific areas.
in Docket
No. R97-1.
asks for the current operating
plan for
OCA/USPS-120
at the hearing on March 19, 1998, during the
by OCA, the Presiding
Officer, and others.
The plan was copied
into the record.
now requested
is
The Postal Service provided a similar
middle of FY 98, that plan was the subject of a significant
information
was demonstrated
in response to an OCA interrogatory
Subsequently,
merit.
Docket No. R97-1, and its relevance
in this case. The interrogatory
plan for FY 98, without objection,
rate proceeding
are without
amount of cross-examination
See Docket No. R97-1, Tr. 33/18668-84.
Tr. 33118661.
That plan consisted
by OCA in OCAWSPS-TS-27(a)
of the
for FY 2000 is essentially
the same as that provided without objection in Docket No. R97-I.
The Commission
in its Docket No. R97-1 opinion even discussed
plan, still not finalized at the time of the Commission’s
utilized the plan in its decisional
process.
the operating
Opinion on May 11, 1998, and
See, for instance,
PRC Op. at 39-41 and 49-
58. The availability
of the full year’s plan was important even though part of the year
was not completed.
It assisted the OCA and the Commission
profit expectations
of the Postal Service.
in determining
This was plainly relevant to the issue raised
by OCA and ANM as to the Postal Service’s need for the revenue requested
as the Postal Service claims of profit shortfalls
were proving to be inaccurate.
the yearly
The operating
inasmuch
and overall operating
plan estimates
plan was also important
in determining
Docket No. R2000-1
4
the likelihood of the Postal Service spending the amounts anticipated
during the test year.
If the spending were significantly
the need for the revenue requirement
now being requested
less than originally planned, then
was significantly
was a key document
for new programs
diminished.
The operating
plan
in resolving the issues raised by OCA and
ANM.
Similarly,
requirement
in this proceeding
needs continues
of the interrogatories
the issue as to the Postal
to be an important
Service’s
revenue
issue for the same reasons.
Several
of ANM also indicate the operating
the entire year is relevant.
See ANM/USPS-TS-45a
and b.
The Postal Service also objects that the operating
may involve a reallocation
However,
this objection
of resources
information
units and programs.
overall operating
in response to ANMlUSPS
plan is not subject to change. ’ Likewise,
sought is predecisional
budget process is flexible and
organizational
does not apply to the requested
Postal Service has already indicated
operating
among
plan of the Postal Service for
plan.
The
T9-45 that the &
the Postal Service claim that the
and is still subject to change, i.e. the Postal Service
has not decided finally on the plan, is not applicable to the overall plan.
II.
OCAIUSPS-TS-27(b)
and OCA/USPS-81
OCAWSPS-TS-27(b)
requests “the most current USPS FY 2000 Operating
with operating
I
revenues
broken out by mail class and subclass
cost categories.
Plan
More
Postal Service March 14, 2000 response to ANMIUSPS-T9-45a,
in part, “The Total Revenue plan
has not changed since the beginning of the year and it will remain constant throughout the year.” Postal
Service response to ANMIUSPS-T9-45b,
in part, “The Total Expense plan has not changed since the
beginning of the year and it will remain constant throughout the year.
Docket No. R2000-1
5
broadly, and inclusive of OCAIUSPS-TS-27(b),
the OCA also requests
81 the “FY 2000 budget plan in full detail (i.e., by Accounting
in OCALJSPS-
Period and mail class and
subclass).”
Initially, it should be emphasized
nor should compliance
that these requests are not onerous
require an inordinate
amount of Postal Service resources,
the Postal Service does not claim otherwise.
The Postal Service is currently
commercially
make any claims that the material
sensitive
prevents disclosure
material nor does it seriously
is exempted
predecisional
The documents
for potential litigation.
data requested
rates.
from disclosure
as
contend that any other privilege
argument
is specious.
claim is normally a claim of privilege that relates to documents
litigation.
in the
of its budget plans.
The Postal Service’s
possible
and
Nor does the
middle of FY 2000 and the current budget plan must be readily available.
Postal Service
or difficult
requested
The predecisional
prepared
in the course of
here do not relate to material prepared
Also, the Postal Service is not the party to determine whether the
will be useful in reaching
a recommended
decision
on Postal Service
It is beyond dispute that the Postal Services budget is a significant and important
aspect in weighing
the intentions of the management
against which a comparison
assist in determining
for the remainder
of this year and
can be made with the rate application.
the reasonableness
This, in turn, will
of the FY 2001 test year data.
The Postal Service is, in effect, stating that the budget for the year is not final
because
the time period for which it was prepared
subject to change.
of planning
This ignores the fundamental
for revenues
and expenses
has not yet passed and that it is
purpose of an operating
for the immediate
future.
budget, that
Under the Postal
6
Docket No. R2000-1
Service logic, the only financial information
audited
financial
statements
the Postal Service would provide would be
for past periods,
Much of the Postal
Service’s
rate
application
rollforward
data for the interim year and certainly for the test year are not yet
“finalized,”
inasmuch as the time period for which they are prepared has not yet passed.
Any labor costs subject to contract
the cost of fuel are all not “finalized”
Postal Service
adjustments
future capital expenditures
and could be considered
makes no claim that the individual
pursuant
relevant timeframe.
includes
negotiations,
programs
to management
initiatives
estimates
also is adjusted at the discretion
Service readily provides these “predecisional”
class and subclass
that the Commission
introduced
calculation
during
to
the
of witness Tayman
flux and, in those cases, not only are funds
moved around within the overall planned investment
investment
in that the
may not be subject
or programs
Indeed, the entire “other programs”
that are in constant
predecisional
and even
program,
of management.
estimates
but the total amount of
Nevertheless,
the Postal
of revenues and expenses
relies upon in reaching
its decision
by
in all rate
proceedings.
Of course, the OCA recognizes
“final” figures.
The OCA is concerned
in order to compare
the information
between
are projections,
not
with the Postal Service’s current and future plans
them with the documentation
futile exercise in the previous proceeding,
dichotomy
requested
the Postal Service
in the application.
but led to important revelations
claims in its application
This was not a
regarding the
and Postal
Service
7
Docket No. R2000-1
managements
approved
plans and intentions
the Postal Service
budget represents
revenues
plans of management.
information
that portion
prepared
that
participants
Operating
estimate of the details of
budgets
management
the Commission
The information
the
budget
nor the Commission
to the
ignore the
its expectations
must
act as though
proved useful in the last proceeding.
numbers
and
has an Alice in Wonderland
now will again be useful to the participants.
because
are fundamental
defining
The Postal Service objection
an expectation
did not exist.
detail requested
and costs.
by Postal Service
as it indicates
information
another management
Yet the Postal Service would have the Commission
current plans for FY 2000.
suggest
future, particularly
by the Board.’
The operating
aspect
for the immediate
are subject
It is, therefore,
to change,
this
The
absurd to
neither
the
should have access to the details of the total budget
plan.
Finally, the Commission’s
relevant
to the subject
matter
“reasonably
calculated
3001.26(a).
The information
Rule 26 permits
in the proceeding,
to lead to the discovery
approved
2
not only of information
but also discovery
of admissible
evidence.”
of information
39 C.F.R. §
in the plan may well indicate areas of the Postal Service
plans that differ from the application
Also significant
discovery
and for which an explanation
is necessary.
are changes that have been made to the budget since originally
by the Board of Governors
and particularly
since the rate application
was
The interrogatories ask only for the “current” estimates rather than the original estimate and all
adjustments made to date in the FY 2000 budget plan even though arguably that information too would be
relevant to determining the magnitude of adjustments that have been made to date in planned other
programs expenses.
Docket No. R2000-1
prepared.
areas
8
The full detail of the budget is necessary
have been
modified
and what,
application
to the Commission.
The
information
that can assist in this regard.
to determine
if any adjustments
Commission
should
must
have
It is also necessary
provide updates to the budget material as they are made.
which of the budget
be made
available
in the
relevant
that the Postal Service
This is not an onerous
task
and clearly within the realm of relevance.$
Finally,
Commission
with
respect
know
not only the
Service’s financial condition
offices.
The
inconsistencies
to all of the
fully
rate departments
operating
plan
it is important
claims
but also the anticipated
detailed
and errors.
interrogatories,
concerning
accomplishments
serves
as a means
It will also enable the Commission
that
the
the
Postal
of the operating
to
check
for
to better measure
the
current plans of the Postal Service to ensure the right hand and left hand are working
together.
In this regard,
consider
require
requiring
operating
the OCA further
suggests
that the Commission
the Postal Service to report this information
plans, together
with all updates,
seriously
routinely or at least to
to be filed with all omnibus
rate
applications.
For all of the above reasons, the Commission
Service
to respond
OCANSPS
3
fully, with updates
should therefore compel the Postal
as they occur,
to the OCA interrogatories
T9-27 and OCANSPS-81.
Rule 26(f) requires supplemental answers to update responses whenever
response is no longer true and to make it current.
necessary if the
9
Docket No. R2000-1
Respectfully
submitted,
OFFICE OF THE CONSUMER
ADVOCATE
Director
Ofice of the Consumer Advocate
KENNETH
Attorney
1333 H Street, N.W.
Washington, D.C. 20268-0001
(202) 789-6859; Fax (202) 789-6819
E. RICHARDSON
Attachment A
Docket No. R2000-1
OCANSPS-TS-27.
(a) Please
The following refers to the USPS FY 2000 Operating
provide the most current
periods for Postal Service operating
expenses
of the
interrogatory,
OCANSPS-81.
by Accounting
revenues,
appropriations,
Plan by accounting
investment
income,
and volumes.
(b) For each
operating
USPS FY 2000 Operating
Plan.
thirteen
accounting
periods
presented
in part
“a” of this
please provide the most current USPS FY 2000 Operating
Plan with
revenues broken out by mail class and subclass cost categories.
Provide the Postal Service’s FY2000 budget plan in full detail (i.e.,
Period and mail class and subclass).
Attachment B
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
POSTAL RATE AND FEE CHANGES, 2000
Docket No. R2000-1
PARTIAL OBJECTION OF UNITED STATES POSTAL SERVICE
TO INTERROGATORIES
OF THE OFFICE OF THE CONSUMER ADVOCATE
(OCAAJSPS-TS-27 AND OCAAISPS-81)
(March 10,200O)
The United States Postal Service hereby objects to interrogatory
27, filed on February 23, 2000, and OCA/USPSdl,
for late acceptance
filed today.
filed on March 6, 2000. A motion
of the objection with respect to the former interrogatory
The two interrogatories
Interrogatory
OCA/USPS-TS-
is also being
seek the same thing.
OCAIUSPS-TS-27
asks:
The following refers to the USPS FY 2000 Operating Plan.
Please provide the most current USPS FY 2000 Operating Plan by
(4
accounting periods for Postal Service operating revenues,
appropriations, investment income, expenses and volumes.
For each of the thirteen accounting periods presented in part “a” of
lb)
this interrogatory, please provide the most current USPS FY 2000
Operating Plan with operating revenues broken out by mail class
and subclass cost categories.
Interrogatory
OCAIUSPS-81
asks:
Provide the Postal Service’s FY 2000 budget plan in full detail (i.e., by
Accounting Period and mail class and subclass).
The Postal Service objects on the grounds that some of the information
predecisional,
sought is
is subject to change, and would be of no value or relevance with regard
Attachment
to this issues in this case until finalized.
providing finalized accounting
accordance
response
B
The Postal Service does not object to
period plans; indeed it has already done so in
with the Commission’s
periodic reporting rules. Accordingly,
is required for those accounting
periods since the documents
no separate
are already on
file with the Commission.
The Postal Service’s operating
volumes, and expenses
budgetary
budget involves the allocation of revenues,
by accounting
period.
It also involves the establishment
targets and the allocation of resources by organizational
budget targets involve negotiation,
operating
goals.
allocation
of resources
judgment,
Because the operating
process accounting
and the linkage to and support of
units and programs occurs continuously
operating trends, and other priorities.
period allocations
are continuously
the budget’s bottom line. The accounting
unit. Operating
budget process is flexible, a tactical re-
among organizational
reflect changing workload,
of
As a result of this
being revised within the limits of
period spreads are subject to change up until
they are finalized in the Financial and Operating Statement (FOS) for each accounting
period.
The accounting
period plans have already been made available for accounting
periods 1-6 in the Financial and Operating Statements.
period plans for accounting
change.
to
The preliminary
accounting
periods 7-13 are not finalized and are subject to continuous
They will be provided when finalized and printed as the FOSS.
Respectfully
submitted,
UNITED STATES POSTAL SERVICE
By its attorneys:
Daniel J. Foucheaux, Jr.
Chief Counsel, Ratemaking
Attachment
475 L’Enfant Plaza West, S.W.
Washington, D.C. 20260-I 137
(202) 268-2999; Fax -5402
March 10, 2000
Scott L. Reiter
B
CERTIFICATE
OF SERVICE
I hereby certify that I have this date served the foregoing
participants
of record in this proceeding
in accordance
with section
practice.
~,f+P--STEPHANIE
Washington, D.C. 20268-0001
March 23, 2000
S. WALLACE
document
upon all
12 of the rules of