This account includes the functions of city carriers while out of the post office engaged in delivering mail on single-trip multiple-trip, and parcel post city delivery routes. The mail delivered includes letter, air, parcel post and accountable mail. This account includes travel, training, contractual costs, and salaries and related expenses for supervisors and city carriers.

The $13, 542,000 increase in program costs for Fiscal Year 1971 covers the following:

Mandatory Salary Increases of $12, 276,000:

Annualization of Phase III Increase, $1,593,000: This increase represents the cost for the 11 days in Fiscal Year 1970, this pay increase was not in effect.

Within-grade Salary Increase., $8, 297,000: The annual rate of step increases for supervisors in PFS level 9 is $281 and for clerks in PFS level 5 is $206. After considering the effect of varying employee eligibility dates and the anticipated savings resulting from employee

turnover, the estimate for within-grade salary increases averages $60 per man-year for supervisors and carriers.

Cost of Retirement Legislation Increase, $2, 386,000: Public Law 91-93 approved on October 20, 1969, increased the retirement contribution from 6. 5 percent to 7.0 percent begining January 10, 1970. The full year cost of $4, 844,000 in 1971 is an increase of $2,386,000 over the half year cost in 1970.

Gross Employment Increase for Workload, $27,300,000: The workload affecting the city delivery service is composed of the increased number of possible daily deliveries, the anticipated growth in housing units in urban areas, business and family growth, and enlarged area to be serviced. Continuing growth of metropolitan areas, expansion and rejuvenation of downtown business sections, expansion of suburban areas, development of large shopping center complexes and mixed-business areas detached from the principal city, and relocation of business firms to outlying areas contribute to the heavy demands for city delivery service.

In Fiscal Year 1971, the number of possible deliveries per day will increase by 1.2 million, or 2.2 percent. This will increase the number of possible deliveries to residences to a total of 52.7 million in Fiscal Year 1971, and possible deliveries to businesses will increase to 4. 6 million in Fiscal Year 1971. Expansion in possible daily deliveries is due to new areas as well as increased housing units, particularly apartment houses. In Fiscal Year 1971, a total of 53.0 million families and 4. 9 million businesses will be serviced.

Increasing mobility of the population, improved transportation

systems between urban and suburban areas, and the continuing decrease in density of housing significantly affect the cost of providing delivery service. In Fiscal Year 1971, an expansion of 2, 850 square miles, or 4.0 percent, in the area to be served by city carriers is projected, for a total area of 74,277 square miles.

The combined effect of the above workload factors will require an increase of 4,000 delivery routes, or 3.0 percent, for a total of 136, 700 routes in Fiscal Year 1971. Without considering anticipated cost reductions, employment required to meet these workload demands would increase by 3, 763 man-years or 2.7 percent, at a cost of $27,300,000.

Motorization of Carrier Routes, $12,019,000: An increase of 10,921 motorized carrier routes in each of Fiscal Years 1970 and 1971 will result in a cost reduction in this account of 1,515 man-years representing $10, 125, 000 and a decrease in the cost of transporting carriers to and from their routes of $1,894,000. Motorized routes now number 60, 235; our goal is 93,000 motorized routes. Savings are derived by (1) the reduction in travel

time to and from the route, (2) elimination of carfare or carrier transportation allowance to and from the route, (3) elimination of a parcel post route for every 10 foot routes motorized, (4) reduction in the number of relay boxes, and (5) reduction in street time per delivery unit. All of the above items result in reduced minutes per possible delivery. The increased vehicle operation costs for the additional vehicles used for motorization are reflected in the vehicle service account. Net savings for motorization are estimated to be $1. 13 per route per day. Combining the increased cost in the vehicle service account with the reductions in this account results in a net reduction in Fiscal Year 1971 of $8, 141, 000 in the Operations Appropriation resource requirements.

Vertical Improved Mail Service (VIM), $339,000: It is estimated that 150 additional VIM installations in Fiscal Year 1971 will reduce carrier employment by 51 manyears, representing a savings of $339,000. Efforts are continuing to encourage the use of the VIM conveyor system in multi-occupancy high-rise buildings. The VIM program provides earlier, faster, and more frequent deliveries and collection of mail at less cost to the Department. A total of 711 VIM installations are anticipated in Fiscal Year 1971.

Increased Productivity, $13, 791,000: It is anticipated that various management actions will have a further effect on carrier supervision and productivity in Fiscal Year 1971. While the reductions have not been identified with specific programs, the estimated requirements for this activity have been reduced by 1, 950 man-years representing a savings of $13, 791,000 in anticipation of the implementation of programs to reduce delivery costs.

Net Employment Increase for Workload, $1, 151,000: The net request for workload, after giving effect to the improvements resulting in total estimated cost reductions of 3, 516 man-years and $26, 149, 000 will provide a net increase in employment of 247 man-years, or 0.2 percent at a cost of $1,151,000. This level of cost reflects a 2. 1 percent carrier productivity improvement over 1970 as shown below:

Other Workload Increases, $115,000: The 1971 estimate includes an increase of $39,000 for car and taxi fares for a total of $5, 680, 000; an increase of $71,000 for carrier driveout agreements, for a total of $10, 244, 000; an increase of $3,000 for tolls and ferriage, for a total of $479,000; an increase of $1,000 for travel related to employment increase for a total of $135,000; and an increase of $1,000 for employee travel in connection with employee training programs, for a total of $142,000. These additional requirements are related to the growth in this function. The funds requested reflect a total of $1,000 for movement of household goods, the same amount provided in 1970.

The following estimate schedule summarizes the resource requirements for this function: