Minnesota lawmakers ask: How long until licensing system fixed?

Administrators of Minnesota's new, glitch-plagued vehicle licensing and registration computer system said Thursday they should have a road map by later this month to fix problems that continue to delay car title transfers, license plates and tabs.

But until then, to the dismay of state lawmakers, they wouldn't estimate how long it will take after that to repair the system, or how much it will cost.

"I have simply come to the conclusion that I no longer have any faith that the folks who currently are trying to fix this have the ability to fix it," said Sen. Scott Newman, R-Hutchinson. "And I am frustrated, because it's going to cost my constituents a whole lot of money." Newman, chairman of the Senate Transportation Finance and Policy Committee, grilled state officials Thursday on the troubled rollout of the registration system, which the state debuted in July after 10 years of planning.

Since then, residents have spent more time waiting in line at licensing offices and waiting months for new car titles.

The system also doesn't allow people to transfer specialty license plates. The cost estimate for the Minnesota Licensing and Registration System, or MNLARS, ballooned from $48 million to $93 million in recent years, and that total is expected to grow.

The delays have had a ripple effect on auto dealers and the insurance industry and the local governments and private business owners who run the 174 licensing offices around Minnesota.

Car dealers have been forced to pay late fees, said Minnesota Auto Dealers Association President Scott Lambert, though he noted the percentage of association members saddled with such fees is down from half in November to one-third now. Two-thirds of his members are missing titles, down from three-quarters, he said.

"The paperwork is just simply getting tangled up," Lambert said. It has caused "innumerable" problems with dealers' business operations and their relationships with customers, banks and vehicle manufacturers, he said.

Meanwhile, it is taking a long time for insurance companies to get copies of car titles needed to process insurance claims. It puts their customers "in a difficult pickle," Mark Kulda, with the Insurance Federation of Minnesota, told legislators.

Counties and cities that manage licensing offices are dipping into their coffers to pay for late fees and staff overtime, said Cindy Geis, Scott County's property and customer services director. She noted that many private registrars who also run licensing offices are using money from personal bank accounts. Some state legislators have suggested the state should bail out offices that have had significant financial losses.

Geis said she is worried about the impacts of the federal Real ID law, as Minnesota has to issue new licenses that comply with a different security standard. She said Scott County might cut their passport services so they can focus more resources on licensing.

A lot of work remains on the MNLARS backlog, Department of Public Safety Commissioner Mona Dohman said. But she said there has been progress on reducing it and that the system has improved in the past two months. They are also more responsive, she said, with her department responding to consumer e-mails about problems in a day, rather than a week.

Dohman said her staff has been putting in mandatory overtime during the week and voluntary overtime on weekends to fix issues, and they temporarily hired additional staff to process title applications.

The backlog of vehicles titles was whittled down by 50,000 to 319,357 unprocessed titles, according to Dana Bailey, Minnesota IT's new executive director of projects and initiatives. She is holding a series of meetings around the state to hear concerns from stakeholders, like deputy registrars and auto dealers, which the state will use to create its road map to repair the system.

Newman, however, said the rollout of MNLARS and issues with the MNsure health insurance exchange sapped his trust in the Minnesota IT department and the Department of Public Safety. In the upcoming legislative session, he said he expects someone will question whether Minnesota IT can handle such big projects.

Sen. Melisa Franzen, D-Edina, tried to inject some optimism Thursday.

"I know we're all frustrated," she said, because of the lack of definitive answers about how things will improve. "What I've heard is the plan will be provided to us by the end of this month. ... We need to know exactly what you're planning on, and I have confidence we are going to figure this out."

Jessie Van Berkel • 612-673-4649