Local DMV offices bear the brunt of costs from state MNLARS system

More than 18 months after the state rolled out its glitch-ridden driver's licensing and registration system, local branches and offices that have navigated customers through the delays are wondering if they will ever get reimbursed for their extra hours and overtime costs.

The problematic Minnesota Licensing and Registration System (MNLARS) has cost Roseville more than $100,000 since it debuted in July 2017, driving up overtime and personnel costs by an additional $7,000 to $8,000 a month, city officials said.

At Bloomington's licensing center, employee pay is about 21 percent over budget this year because of the extra work, said City Clerk Janet Lewis. "We've been doing this a long time and our office didn't used to need a tax subsidy because it relied only on user fees to operate," Lewis said. "Now we have to funnel in taxpayer support."

In all, the 174 local offices and licensing centers that deal with the public — called deputy registrars — were out about $9 million in the first year with MNLARS. And that number is growing, said Jim Hirst, a lobbyist for the Minnesota Deputy Registrar's Association. "These transactions are just taking longer at the service centers," Hirst said. "It's not only the glitches and the gaps, but a lot of the data input and back-end work now has to be done upfront by the deputy registrars — which takes more time, which means longer lines, which means we have to hire more people."

Unlike most states, Minnesota doesn't directly operate its vehicle service centers through its motor vehicle department. Instead, the state appoints deputy registrars to run the offices that actually serve the public.

Most of the 174 service centers are operated by city and county governments, but many are run by businesses.

Service centers make money by collecting filing fees from customers, which are determined by state law and attached to each transaction.

The money made from filing fees isn't keeping up with the added costs under the new system, said Roseville City Manager Patrick Trudgeon. "It's been years since those fees have been increased, and now with the bugs in the new system and the longer customer wait times, it's illuminating the whole process," he said.

Whether or not filing fees are raised, local offices ought to get a bigger cut of the state's take from each transaction, Lewis said. "We know the state is strapped for cash too, but following MNLARS the state does still collect the majority of the fees and they're doing very little of the work," Lewis said. "We're doing almost all of it now, but the fees are still the same."

To try to keep down overtime costs, Bloomington has been relying more on salaried employees, Lewis said. "People are getting tired," she said.

Deputy registrars came close to recouping some of their costs in the last legislative session. A bill to send them up to $10 million was included in an early version of the state's budget, but was removed after lawmakers and the governor's office couldn't agree where the money would come from.

"Going into next session we firmly hope we can get around that impasse and find the resources available so these offices don't have to continue going into debt," Hirst said.

State Rep. Jamie Becker-Finn, DFL-Roseville, said it's hard to say how much support there will be in the Legislature.

"It's a convoluted system and unless you're from a place that's being hurt like Roseville, most people don't know that the offices themselves aren't run by the state," Becker-Finn said. "But in a sense of fairness, the deputy registrars have these extra costs through no fault of their own, and we need to see them made whole."

Greg Stanley • 612-673-4882