COUNTY ISSUANCE OF MOTOR VEHICLE LICENSES STUDY COMMITTEE

November 12, 1997 - Seventh Meeting of 1997

MEMBERS PRESENT

MEETING IN BRIEF

Minutes prepared by Jan Simmons, Legal Counsel
Organization staffing provided by Mike Kuehn, Legal Counsel

1. Administrative Matters.
2. Presentation by Dr. Padgitt Regarding the Customer Survey.
3. Discussion Regarding Expansion of County Issuance.
4. Discussion of Cost Analysis.
5. Discussion of Draft Recommendations.
6. Committee Discussion/Recommendations.
7. Final Meeting.
8. Materials Attached.
9. Materials Filed With the Legislative Service Bureau.

COMMITTEE BUSINESS

1. Administrative Matters.

Call to Order. Chris Van Meter, Chairperson, called the meeting to order at 8:48 a.m.

Opening Remarks. Chairperson Van Meter noted changes to the agenda, citing the necessity for the Subcommittees to meet prior to the Committee deliberations.

Adjournment. The Committee adjourned at 5:48 p.m.

2. Presentation by Dr. Steven Padgitt Regarding the Customer Survey.

Description of Survey Results. Dr. Padgitt opened by noting that they had received close to a 50 percent response rate on the survey, and that surveys responses were still arriving daily at his office at Iowa State University.

The Customer Survey was performed as one source of information to assist the Committee in making its recommendations. The questionnaire was formulated through a review of earlier surveys, as well as Committee input. The questionnaire was mailed to the sample group in September, followed by two different reminders.

The sample group was composed of two subgroups: customers who received driver's license services in last six months at a county treasurer's office, and customers who received driver's license services in last six months at a Department of Transportation (DOT) site. Each subgroup was approximately 500 persons. The size of the sample group was chosen for its statistical significance.

Responses. Dr. Padgitt reviewed the comparative answers of the two subgroups, noting that the answers did not vary greatly on most questions. Among those persons responding to the survey, gender and age were relatively balanced. There were some differences in answers according to age, because age often determines which services were received. Most respondents obtained an operator's license; most respondents were pursuing a regular renewal of their driving privileges.

Most respondents selected the site where they obtained their license services because of its proximity to their home. Most persons visited that site solely because of the need to receive license-related services, but some persons were doing other business at the site, too. Persons receiving their license at a county treasurer's office reported a higher travel time to get to the driver's license service, but a slightly lower waiting time for their first contact with an employee than persons receiving their license from a DOT site. Persons at county treasurers' offices were more likely to rate the service they received as excellent, rather than good. Persons at DOT sites were more likely to suggest that additional days or hours of operation were necessary, but more likely to believe that DOT facilities are more suited toward protecting the public safety in issuing licenses than county treasurers' offices.

Most other questioned topics showed no statistical difference in the responses received.

Questions by Members. Chairperson Van Meter asked about the hours of service at test counties, noting that the information she had heard at the public hearings do not match the survey responses. Do people consider lunch hour "working hours"? Dr. Padgitt indicated that he did not know. The questionnaire is designed only to test perceptions.

Dr. Edelman asked if the original sample included persons who resided outside of the county where the license was obtained. Dr. Padgitt and DOT personnel confirmed that it did.

Chairperson Van Meter thanked Dr. Padgitt for his work, indicating that the report was excellent.

3. Subcommittee Reports.

Technology. Nancy Richardson noted that the draft final report summarizes the Subcommittee conclusions. Smart card technology is not likely to be implemented in the immediate future. Rather, the main change will come in the immediate future in the form of better printers. Decisions about the form of issuance (mail-in renewals, computer renewals, etc.) are really policy matters.

Therefore, technology will not be the driving force in any decision regarding local issuance of driver's licenses. However, nothing regarding technology either precludes or requires expansion of the current system of local issuance.

Quality. Sharon Winchell, Subcommittee chairperson, reviewed the activities of the Subcommittee, including: (1) development of the Customer Survey, as presented by Dr. Padgitt; (2) development of fact scenarios, as utilized by the Cost Subcommittee in developing the cost analysis; (3) conducting two public hearings; and (4) review of the current 28E Agreement between the department and issuing counties, and development of recommendations regarding changes in future versions of the agreement.

4. Committee Discussion Regarding Expansion of County Issuance.

Chairperson Van Meter indicated that each member should indicate their initial positions on the issue of whether to expand the current system of county issuance of driver's licenses.

Ms. Winchell stated that in her opinion, the experiences of the six counties currently issuing licenses have been good, and that the Committee should not talk about any option other than expansion.

Ms. Richardson expressed her opinion that expansion would cost the taxpayer more, and that it would be more difficult to assure consistent issuance with an expanded system of county issuance. Therefore, she indicated she is opposed to expansion.

Chairperson Van Meter stated that she is not opposed to the practice of local issuance, but that she is not in favor of increasing costs to taxpayers. She indicated that she would consider expansion, if it included an alternative funding source other than the current use of Road Use Tax Fund (RUTF) moneys.

Mary Kay Williams stated her belief that citizens in her county want service five days a week, and that she does not believe it costs an excessive amount to issue licenses through the counties. She would consider a service charge (in Florida referred to as a "convenience fee").

Wayne Walter indicated that the committee process has been educational for him, and that he has gained a new level of respect for the DOT. He does not want to compromise their level of service, but thinks it is possible to expand the county issuance system without compromising quality of service. His county's citizens want county issuance. Government is measured by the amount of service it gives, and he wants to give citizens more service.

Peggy Smalley stated that she supports expansion of county issuance. Her county wants service. She often hears people who wait until the last minute to renew their license, and who call to find out where they can go that day to obtain a license. For economic reasons, she does not want to have to send them out of the county seat, or even possibly to a neighboring county, to get their license and do other business.

Terry Dillinger indicated that he is not in favor of expansion. He wants to deliver service to citizens, but does not think there is insufficient service being delivered in the present system, and believes that the Customer Survey results support this belief. Absent a clear message from the public that they are willing to spend more money for service, the state should not commit additional resources for expansion of county issuance of driver's licenses. Many questions related to the issue are still unanswered.

Bob Hagey stated that he supports expansion. He reads the survey results as noting that there is room for improvement in delivery of driver's license services, and that supports expansion of services.

Warren Jenkins stated that he may be in favor of expanded county issuance or driver's licenses. If there is an opportunity to provide additional service availability at a reasonable cost, then it should be considered. But the Committee also has to consider public safety. If there is significant public safety concern associated with expanded county issuance, then additional service availability does not mean anything. If there is a safeguard for public safety, then the Committee should consider expansion.

Don Breniman indicated that for him, public safety is the key issue. He wants trained personnel providing driver's license services. It is important to scrutinize the service offered by the counties.

Darren Van Helden stated that he questions the need for making any change. The public has indicated its satisfaction with the current system. Driving is a privilege. The opportunity for obtaining driver's license services is adequate. Public safety is an important issue for the Committee to consider in conjunction with this issue, especially with the aging population in this state. He stated that he prefers trained persons delivering service, and does not support any increased cost to motorists in any form.

Pat Milligan stated that the current system involves spending RUTF dollars for administrative costs, and that he prefers the use of a funding mechanism that does not utilize these RUTF dollars. He believes that the Committee should discard all unacceptable fact scenarios and proceed to discuss only the remaining ones.

Dr. Edelman stated that he prefers to remain primarily as a technical assistant to the Committee, and for that reason, would prefer to remain neutral for now.

5. Discussion of Cost Analysis.

Explanation of Cost Analysis. Warren Jenkins, chairperson of the Cost Subcommittee, explained the process that the Subcommittee used to arrive at its conclusions, as contained in the cost analysis.

The Cost Analysis Subcommittee took the seven scenarios as provided by the Quality Subcommittee and made certain modifications to facilitate the making of cost analysis. Analyses are done for the first year, as well as providing subsequent annual cost.

The key unknown factor is the lease cost for subsequent digital-imaging equipment costs. The Subcommittee used figures from prior RFP responses, based on information from Mr. Dave Snodgrass (the private consultant who spoke to the Committee) that some costs of the licensing process would go up in future, but that others would go down, so that it would essentially be a wash. This was the Subcommittee's assumption, for purposes of analysis.

The Subcommittee also assumed that as "clusters" of counties that are added to the county issuance system, corresponding DOT itinerant teams would be eliminated. The cost analysis reflects the resulting cost, given this addition and subtraction of personnel at each level.

Chairperson Van Meter added that adjustments were made to the scenarios as originally developed by the Quality Subcommittee. The Cost Subcommittee assumed there would be restrictions on options allowing counties to choose to issue licenses (opt in scenarios) for purposes of calculating costs.

Questions by Committee Members. Mr. Dillinger asked if it is a correct understanding to believe that if there were multiple phase-ins during a single photo-licensing contract, it would greatly affect the contract price. Mr. Jenkins stated that that is correct a statement, but that the report assumes, however, that all numbers would be known before the RFP would go out and that therefore, the contract would already reflect that.

Dr. Edelman suggested that there should be exploration of the concept of bidding maintenance costs separate from initial equipment costs, in order to save more money for the state.

Mr. Dillinger also asked whether any assumptions differed from those used in previous fiscal notes. Dave Reynolds, Legislative Fiscal Bureau, replied that the procedure used in relation to county numbers was an average incremental Cost Subcommittee, resulting from the time study performed by the Cost Subcommittee, whereas prior fiscal notes used fully allocated costs. The numbers in the final report all reflect incremental cost, which is the amount above what the current service costs.

The cost analysis shows the net dollar impact for each scenario. It does not assume the $5 reimbursement required by current law, because a law change of some sort is anticipated. The "go away" cost, or how much a county would save if they did not offer service, is $3.06 per issuance, according to the data collected in the time study.

Mr. Dillinger asked if that amount is currently part of the county budget. Mr. Jenkins explained that yes, initially that cost came out of the county budget, but it was reimbursed by the state through the $5 per transaction reimbursement. The Cost Subcommittee was attempting to derive the real cost, in dollars, of the county offering driver's license services. Mr. Jenkins further explained that the reimbursement is a revenue, which shows up in a different part of the balance sheet. It does not appear in the cost section that is shown in the cost analysis. Once the incremental cost is determined, it reveals the net shift of dollars between state and county government. The level of reimbursement to the county, if any, is then determined as a matter of policy.

The Committee agreed to changes in some of the labels and the order of the pages in the cost analysis in order to more clearly reflect these points.

6. Committee Discussion/Recommendations.

a. Hours of Service Reduction. (A listing of the scenarios referred to in these minutes is contained in Attachment 1). Ms. Winchell made a motion to remove from consideration all fact scenarios which reduce hours of service (Scenarios 4, 5, and 7, as attached in the appendix). The motion was seconded by Mr. Milligan. Ms. Winchell continued that there is a problem every time service is eliminated or curtailed. Chairperson Van Meter noted that the Committee had not yet discussed the pros and cons of each scenario.

Action. A roll call vote on the motion yielded the following vote: 7 no and 6 yes. The motion failed.

Further Discussion. Ms. Richardson asked whether the prior motion meant that the fact scenarios must form a basis for any recommendation, or whether the Committee is going to potentially take bits and pieces from various scenarios. Mike Kuehn, Legislative Service Bureau, explained that the scenarios formed the basis for the cost analysis, and can form the basis for a recommendation, or parts of various scenarios can be part of a recommendation, or a recommendation can be totally independent of any scenario. The formulation of recommendations is up to Committee members.

b. County Opt In. Mr. Milligan made a motion to eliminate the consideration by the Committee of Scenario 3, because it would be too difficult to implement and administer. Mr. Walter seconded the motion. After brief discussion, the motion was tabled.

Mr. Milligan later moved his previous motion that had been tabled. The motion was seconded by Mr. Van Helden. Mr. Jenkins asked if the 84 counties could opt in over time. Mr. Milligan indicated that would be acceptable, so long as all counties were not permitted to opt in at the same time.

Action. A short-form vote was called for, and the motion passed. Dr. Edelman voted no, and explained that the excluded option would have meant the greatest cost savings to the state.

c. Current Counties. Mr. Jenkins then moved that any recommendation of the Committee should automatically include the continuation of the six counties currently issuing licenses. Per current legislation, no county currently issuing could "opt out" of continued issuance. However, if another contiguous county could be persuaded to "opt in" in place of one of the counties, consistent with the "clustering" concept previously discussed, then one of the original six counties would be permitted to opt out. The motion was seconded by Mr. Milligan.

Chairperson Van Meter asked what would happen, under the current motion, if an opt out county was in the middle of the existing cluster, and was not on the perimeter of the "cluster," or group, of counties. Mr. Jenkins replied that such an event would be possible, so long as the new county would satisfy the cluster concept, when combined with the remaining counties in the cluster.

Action. A short-form vote on the motion indicated that the motion passed. Ms. Richardson abstained from the vote.

d. Eliminate Local Issuance -- Scenario 6. Mr. Milligan then moved that the Committee eliminate consideration of Scenario 6, because the costs associated with that scenario would be prohibitive. The motion was seconded.

Action. A short-form vote was called, and it passed.

e. Use of Cost Scenarios. Ms. Williams moved, and Mr. Walter seconded, that the cost scenario's assumptions (as reflected in the cost analysis) be used in any recommendation passed by the Committee.

Action. A short-form vote was called, and the motion passed.

f. Other Scenarios to Eliminate County Issuance. Ms. Richardson asked what issues could be considered after the combined effect of the previous motions. After some discussion, a consensus concluded that all scenarios within Group 2 (Scenarios 4, 5, 6, and 7) had been eliminated from consideration, unless costs were to be added to the issuances system.

g. Opt In Dates. Mr. Milligan requested that Scenario 2 be discussed, line by line. Mr. Jenkins and Mr. Reynolds detailed the source of, and reasoning behind, each line of the calculation associated with Scenario 2. Mr. Dillinger noted that the training costs may be higher than assumed, however, because training cannot completely be performed within clusters.

Mr. Milligan asked if this analysis was applied to each scenario. Mr. Jenkins replied that it was.

Chairperson Van Meter then moved that any recommendation include a "drop-dead date" (a date by which a county must affirmatively opt in or opt out for the succeeding RFP period) at a time sufficiently prior to an RFP issuance to permit the RFP to specify a certain number of counties participating in the process. The motion was seconded.

Action. A short-form vote was called, and the motion passed.

h. Cluster Concept. Mr. Van Helden next moved that all recommendations would incorporate the "cluster concept" (a contiguous group of four to six counties would replace a currently existing DOT itinerant team), as the concept was described in the original scenario (which allows for some flexibility in defining a cluster). The cluster would not have to be the precise group of counties currently served by a single DOT team. New proposed "clusters" would be permitted, so long as DOT would not be required to reduce service to any existing county. The motion was seconded.

Mr. Dillinger asked whether a cluster of counties could agree to provide service to a nonparticipating county (a neighboring county not agreeing to be part of the cluster), in the event that a proposed cluster would make service by an itinerant team to the nonparticipating county difficult, or would reduce its service below present levels. Chairperson Van Meter suggested that the topic be proposed as a separate motion.

Action. A short-form vote was called, and the motion passed.

i. Adding Counties. Mr. Dillinger next moved that clusters of counties be allowed to propose service to nonparticipating counties, as he had previously queried. In conjunction with that motion, he moved that the collective conditions, as formulated by Quality Subcommittee scenarios, be included as part of any Committee recommendation. The motion was seconded.

Action. A short-form vote was called, and the motion passed.

j. Administrative Authority. Ms. Richardson then moved that any recommendation include the assumption that permanent administrative authority for state and county driver's licensing issuance functions would remain with DOT. The motion was seconded.

Ms. Richardson remarked that it is her belief that central administration of driver's license services is critical for quality assurance and consistency purposes, and that she wants to assure that the administration issue is expressly addressed in the Code.

Action. A short-form vote was called, and the motion passed.

k. Chapter 28E Agreements. Ms. Winchell proposed that the recommendation include the required elements of any Chapter 28E agreement, as recommended by the Quality Subcommittee (see Attachment 2). The motion was seconded.

Ms. Richardson asked whether the element of progressive discipline, as recommended for inclusion by the Quality Subcommittee, included employee discipline. Ms. Winchell responded that it refers to the treatment of the county by the department, pursuant to contract, regarding the county's responsibility for any failure to meet established performance standards. That is, the state cannot control the actual discipline of any county employee, but it can terminate the 28E agreement if a county does not appropriately discipline an employee for failure to meet the established performance standards.

Ms. Richardson also asked whether the motion meant that the listed elements are intended as a minimum requirement for the content of the 28E agreement, as opposed to whether it is an all-inclusive list of content. Ms. Winchell responded that the listed elements are intended to be minimum required elements, not the only ones.

Action. A short-form vote was called, and the motion passed.

l. Photo-licensing Equipment Agreement: How Should It Be Paid For? Ms. Winchell moved that the state should pay for all equipment used to issue the license, as included within any digitized imaging agreement. The motion was seconded.

Chairperson Van Meter stated that she could not vote for the motion in its present form, because it is her belief that there should be some cost-sharing between the county and the state on the licensing agreement.

Ms. Richardson indicated that she believes the Committee should address what the source of the funding is to be, because otherwise the Legislature might assume that the Committee did not address the issue, rather than assuming that the Committee was allowing the Legislature the flexibility to determine the funding source.

Mr. Milligan indicated that he is against using RUTF dollars for payment of the digitized imaging equipment costs.

Ms. Winchell withdrew her motion.

m. State Reimbursement. Mr. Milligan next moved that the state continue reimbursing the counties $5 per license transaction. Ms. Winchell seconded the motion.

Chairperson Van Meter indicated that she would be unable to support such a motion until she knew what items would be paid for by each entity (county and state).

Mr. Jenkins stated that he sees the issue as stated by Chairperson Van Meter as a "package." Neither aspect should be decided alone, but rather the two aspects must be part of one recommendation.

Mr. Walter asked about the proposal regarding increasing licensing fees that had been distributed to Committee members by Mr. Milligan during a break in Committee activity (see Attachment 3).

Mr. Milligan withdrew his motion.

n. Increasing Licensing Fees. Wayne Walter then moved that the Committee adopt Milligan's plan. The motion was seconded.

Mr. Van Helden indicated his belief that the plan had the appearance of a subsidy, benefiting some groups more than others. Mr. Jenkins agreed with Mr. Van Helden's comments.

Ms. Winchell stated that the costs of operating driver's license services have increased over time, but there has not been an increase in the fee charged for the service in a long while. She stated her belief that other programs in the Department of Transportation were essentially subsidizing driver's license issuance, and that there should be some adjustment in fees charged.

Ms. Richardson asked about the current level of revenue from licensing activities. Mr. Breniman indicated that the revenue is approximately $11 million per year. Ms. Richardson then asked about the current cost to issue licenses, and Mr. Breniman indicated that it is slightly less than the current revenue figures. Mr. Reynolds confirmed that the licensing program pays for itself.

Mr. Jenkins indicated that he would not support the present motion. Chairperson Van Meter indicated that she would not support the motion because it is not politically viable, and that she did not want the Committee's work to have been in vain.

Action. A roll call vote was called, and the motion failed, 6-6.

o. Use of RUTF Funds. Mr. Jenkins moved that the state should pay for the digitized imaging equipment with RUTF dollars, and that counties be reimbursed $3 per license transaction. Ms. Winchell seconded the motion.

Mr. Jenkins indicated that an expanded system of county issuance would require more sets of equipment, and that that would place more of a demand upon the RUTF, but under his proposal, the counties would bear some of the responsibility for the increased cost of the program. His proposal conserves some of the RUTF funds, but counties still have the opportunity to provide driver's license service to their citizens, if they so choose. In his opinion, counties have emphasized the desire to offer the service to their citizens, so that it is a service decision, not primarily a money-related one.

Mr. Milligan indicated that he does not believe that $3 per transaction is sufficient, and that consideration should be given to initial installation costs.

Mr. Jenkins stated that he recognizes that there will be different situations in different counties, and that the $3.06 incremental cost to the counties of currently providing license services is only an average amount. But a uniform reimbursement amount treats counties equally and leaves the investment decision to the county.

Chairperson Van Meter asked that, since the cost to counties would be less in years after the first year, whether Mr. Jenkins intended by his proposal to benefit the RUTF in those subsequent years, since there is a projected overall cost savings. Mr. Jenkins indicated that he does intend that. He added that he believes that the counties should get back approximately what they are spending to offer the service.

Ms. Winchell asked to clarify where the cost savings would accrue, and Chairperson Van Meter and Mr. Jenkins replied that, according to the cost analysis, under Scenario 2, with a $3 reimbursement, in years after the first year of operation, there would be a net benefit of $150,000 to the RUTF. Ms. Winchell indicated that she does not believe that the RUTF should receive the financial benefit, and Mr. Milligan agreed with her, stating that he does not believe that participating counties should bear so much of the cost.

Mr. Jenkins then amended his motion to provide for a $3.50 reimbursement to the counties for each license transaction. He stated that a $3.75 reimbursement would result in a $750,000 net transfer to counties.

Ms. Richardson stated that she agreed with the $3 reimbursement proposal. She does not believe that counties should financially benefit for issuing licenses. That is, counties should not receive more than it costs them to issue the license.

Mr. Milligan indicated that he would prefer a $3.75 reimbursement level, to prevent the need for another legislative change in the amount in the near future, because costs to issue licenses are bound to increase for the counties over time. He would prefer an amount that could stay uniform for some time.

Mr. Jenkins indicated that he could accept Mr. Milligan's proposal, and amended his motion to provide for a $3.75 reimbursement for each license transaction, which would apply to all counties equally.

Action. A short-form vote was called, and the motion passed.

p. Number of Counties to Participate in County Issuance. Bob Hagey moved that county issuance should be expanded to include up to 42 additional counties, as provided in Scenario 2. The motion was seconded.

Ms. Williams indicated that she believes that this number reflects a realistic estimate of the number of counties that would choose to issue licenses, and that she believes it is a cost-effective proposal.

Ms. Richardson indicated that she opposed the motion. She opposes any change from the current system, because the evidence shows that the level of satisfaction with the current system is fine, and any change will not only cost more, but will not maintain the level of consistency required in the program.

Chairperson Van Meter noted that she had received a letter from Darrel Rensink, as hand-delivered by Ms. Richardson, that indicated he opposed all scenarios that carried a greater cost than the present system. Chairperson Van Meter asked Ms. Richardson if that meant he would support a proposal that was calculated to produce an overall cost savings, or no cost. Ms. Richardson stated that she did not know if Mr. Rensink would view this proposal as producing a cost savings. But even if there is no cost involved, why should the Committee propose a major change to the current system? She believes that public safety is the overarching issue, and that the cost issue alone would not determine Mr. Rensink's position on the proposal.

Ms. Williams asked if the training costs would eliminate cost savings in the event that less than 42 counties would choose to opt in to the program. Chairperson Van Meter stated that that is not necessarily true. Mr. Breniman noted the incremental cost information regarding the digitized equipment agreement.

Action. A roll call vote was taken, and 8-4, the motion passed.

7. Final Meeting.

Chairperson Van Meter stated the need for another meeting to discuss the final draft of the recommendations and final report. The Committee tentatively agreed to meet on December 3 at 10:00 a.m., in Room 1 of the Capitol. Mr. Kuehn suggested that at that time, the Committee's scheduled action will be to approve or to disapprove the report.

8. Materials Attached.

a. Driver's License Issuance Scenarios.

b. 28E Agreements.

c. Milligan Proposal.

9. Materials Filed With the Legislative Service Bureau.

a. Draft of Final Report of Committee.

b. Preliminary Cost Analysis.

OTHER INFORMATION FOR THIS COMMITTEE:

| Charge | Members | Staff | Final Report |

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