DMV Seeks More than $168M to Improve Service, Process, Technology

The Department of Motor Vehicles will need more than $168 million to overcome many shortcomings identified in a recent audit and undertake new initiatives aimed at improving service ahead of the 2020 Real ID deadline, the state said late Friday.

In two so-called “spring finance letters,” which reflect certain changes to Gov. Gavin Newsom’s January budget proposal, Department of Finance (DoF) Director Keely Martin Bosler informed the leaders of three legislative committees that the DMV needs slightly more than $168.2 million. The money will enable the embattled agency to meet anticipated demand for federally mandated Real ID-compliant driver’s licenses by the Oct. 1, 2020, deadline; and to implement projects formalized in a memo sent Thursday by Government Operations Agency Secretary Marybel Batjer, who since January has led a DMV Strike Team in an agency overhaul.

“The thrust of both of these requests is in line with and in furtherance of the findings made by Government Operations Agency Secretary Batjer and her Strike Team that the Governor had her head up earlier this year as well as the audit that our agency completed earlier this week,” H.D. Palmer, DoF’s deputy director for external affairs, told Techwire. The funds will pay for items in two areas. The larger will amend various budgetary items in support of the DMV, with a net of slightly more than $162.2 million, to pay for 179 positions and address “a range of long-term operational improvements.” These include:

• Continue funding 900 existing temporary positions and 970 or more new temporary positions, including temporary hires and permanent intermittent employees.
• “Much needed customer service improvements” including the ability to take credit card payments in field offices; and the redesign and streamlining of the DMV’s website to cut down on office visits.
• Improved employee training to raise DMV customer service in line with other state departments; enhanced regional management to boost field office oversight; development of mobile transaction facilities; and expanded use of DMV kiosks. In a formal memo to Newsom’s office sent Thursday, Batjer indicated that the DMV will pilot a pop-up field office in April and add 100 self-service terminals, or kiosks, by summer and another 100 by year’s end.
• “Critical information technology improvements” including replacing “outdated and unreliable hardware” like terminals, servers and circuits; and network redundancies to stabilize a system Bosler characterized as “fragile and at risk of complete failure.”

“While these longer-term changes are made, DMV must continue meeting the changing needs of its customers," Bosler said in the letter. "DMV’s greatest short-term challenge is addressing the temporary spike in field office visits driven primarily by the federally mandated Real ID Act.” 

The DoF director said two requests have been made “consistent with this proposal” to the Joint Legislative Budget Committee to “augment DMV’s 2018-2019 budget authority by $46.4 million” to eliminate increased wait times and fund early hiring and training of 300 temporary positions requested in fiscal year 2019-2020 to prepare for the summer rush. To pay for these, DoF proposes:

• Suspending the mandatory pension loan repayment for five years beginning in FY 2018-2019, to make $320 million available short-term. Payments would be moved to other years when “there is less cost pressure on the Motor Vehicle Account (MVA) from Real ID implementation,” Bosler said.
• Suspending for five years the yearly Budget Act transfer of at least $90 million in MVA revenue from non-transportation-related DMV services. This would free up $485 million short-term and begin in FY 2019-2020.
• Passing on credit card fees to customers beginning in FY 2019-2020, similar to the practice of state agencies including the Employment Development Department and others. It’s estimated this would generate a savings of $114 million for the MVA over the next five years, which would help fund the proposal, DoF said.

The number of Real IDs issued has more than tripled year to year, from 13.6 percent of overall driver’s license volume in January 2018 to 43.1 percent in January 2019, Batjer said in her memo. More specific to meeting the challenge posed by Real ID, the Finance Department said it received a request from the DMV to augment the Motor Vehicle Account by $5.9 million. Largely funded by registration fees, the account is in danger of becoming insolvent, The Sacramento Bee reported last month.

• Within this $5.9 million, the DMV would spend $4.5 million to fill 300 temporary positions proposed in FY 2019-2020 to keep down wait times during the summer rush.
• This money would also pay $1 million for a contract to train all DMV field office employees for a full day, likely in June, on how to reduce transaction times, return visits and wait times.
• It also includes $250,000 to hire a vendor to create a communications strategy around better informing residents about what paperwork they need to apply for Real ID and what DMV transactions can be done without an office visit.
• And it includes $250,000 to strategize on streamlining the DMV’s website in anticipation of a rise in users generated by educating the public on ways to get agency services without an office visit.

“Without the additional resources requested, DMV’s ability to meet the anticipated summer demand for Real IDs may be at risk,” Bosler said.