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DMV looks at outsourcing

Long lines drive Colorado lawmakers to eye third parties for DMV services

DENVER (AP) – Just after lunchtime Wednesday, Jeffrey Jordan of Wheat Ridge was running late to get back to work. He hoped to make a quick trip to the state Division of Motor Vehicles office in Lakewood. No such luck. The wait took an hour in the crowded, busy office.

“I would drive an hour if it meant I wouldn’t have to wait in line,” he said, after picking up a copy of his vehicle registration.

If a draft bill put forth by the Colorado Legislature’s Joint Transportation Committee passes during next year’s legislative session, he might be able to avoid the wait by visiting a retailer instead.

At least 18 states outsource some of their DMV services to established retailers for vehicle registrations, driver’s licenses and renewals, according to the America Association of Motor Vehicle Administrators. At least 10 states hire private contractors to do driving tests for licenses, as well.

Twelve states use the motor club AAA, but Colorado’s proposed legislation doesn’t single out a vendor, even though AAA suggested the idea for Colorado, Sen. Ray Scott, R-Grand Junction, told the Transportation Legislation Review Committee.

“It appears to be kind of a cool way to take the pressure off our largest (source of) complaints, which is DMV offices, and probably allow people to get things done more quickly, more efficiently and much more happily than presently done,” he said.

The proposal doesn’t yet identify the services that might be provided by third parties in Colorado. Scott said his bill wouldn’t force the DMV to contract out any services, but would give it the option if it made sense and the public wanted it.

Because the legislation is still in the draft stage, no formal opposition has coalesced. The state Department of Revenue, which manages the DMV, won’t comment on it, said spokeswoman Daria Serna.

Scott said the state doesn’t have money to open new DMV offices to cut down the waits, and in some rural areas the offices are too far away or aren’t open at convenient times, so people can go when they’re not at work. A third party’s office could be open on Saturdays, while the DMV isn’t.

The Legislature has been wrestling with the problem for a while. In the last two sessions lawmakers put up $93.3 million for equipment and software to speed up things.

“How certain are we that this is going to alleviate any pressure on the DMV offices, since we’ve put systems in place to do just that?” Rep. Jovan Melton, a Democrat from Aurora, asked Scott.

Scott said the investment in better DMV software was necessary, regardless of whether the state or a third-party vendor was serving the public, because both would use the same system.

Rep. Tracy Kraft-Tharp, an Arvada Democrat and perpetual critic of the DMV, worried about the cost contractors might charge, but Sen. John Cooke, a Republican and former sheriff from Weld County, pointed out there is also a convenience charge for online DMV services. Online convenience fees start at $1, though Denver waives the fees for its residents.

In New England, where most of the states use AAA for some transactions, the service is offered free to the motor club’s members, said Mary Maguire, spokeswoman for AAA Northeast.

“We’re always looking for ways to make the life of a motorist a little more easy,” she said.

In North Carolina, the price to use third-party vendors remains the same for customers, but the state pays the vendors between $1.43 and $3.70 per transaction.

In Arizona, on the other hand, a customer pays an extra $15 to use a third-party for a vehicle registration.

North Carolina has been outsourcing some of its motor-vehicle license-plate and registration services since 1961. The Legislature there asked for an evaluation in 2012, and the report indicated privatizing was a money saver.

State-run offices cost taxpayers $6.13 per transaction. Contractors’ operating costs were $2.12 per transaction, the evaluation found.

“The higher costs of state offices result from their staff size and compensation,” the report stated.

The website EfficientGov, a resource for government policymakers, said the issue is larger than just convenience, which could lead to some interesting debate in the next session.

“There are strong voices on both sides of the privatization discussion, some arguing privatization is an obvious evolution of the public sector in light of tightened budgets while others feel allocating taxpayer money into the pockets of companies is a disservice to the community,” it said in a post about Louisiana privatizing DMV services.

Hilary Chigro, the field director for Colorado WINS, which represents state employees, said such proposals carry risks for state operations and taxpayers.

“Government workers are accountable to the taxpayers,” she said. “Anytime we’re outsourcing that responsibility, it’s a dicey move, because when we give that authority to a private contractor we risk losing accountability and transparency for the taxpayer.”



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