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The 2012-13 Budget: Improving Customer Service Efficiency at the DMV

The 2012-13 Budget: Improving Customer Service Efficiency at the DMV

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Published by: jon_ortiz on Apr 05, 2012
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The 2012-13 Budget:
Impvi Csme SeviceEciecy  he DMV
MAC TAylor • legislATive AnAlysT FebruAry 24, 2012
Currently, the Department o Motor Vehicles (DMV) provides service to over 20 millioncustomers a year and operates 313 acilities. More than hal o these acilities are customer serviceeld oces, with the remaining consisting o telephone service centers, commercial licensingacilities, headquarters, and driver saety and investigations oces. In the last decade, DMV hasmade eorts to improve its eciency and provide better customer service in eld oces andelsewhere, in order to potentially reduce the number o customers that visit eld oces.Te 2012-13 Governor’s budget includes several proposals to build on these eorts. Specically,the budget proposes to incentivize DMV customers to complete transactions in ways otherthan visiting a eld oce by reducing vehicle registration ees or certain customers, combiningtwo inormation technology (I) systems that help to manage the volume o customers in eldoces, and expanding the use o electronic driver license testing. Te budget also proposes severalinrastructure projects, some o which are intended to meet increased demand at DMV eld ocesdue to increases, or shis, in population.We nd that the Governor’s budget proposals have merit and could improve DMV’s eciency by reducing customer wait times and minimizing congestion in eld oces. However, based on ouranalysis, we have identied a number o shortcomings inherent in the proposals. In order to addressthese shortcomings we recommend that the Legislature modiy some o the Governor’s proposals, aswell as take actions to urther expand some o the department’s current eorts to increase eciency and outreach.
rom $20 to $200 depending on the lateness o the payment. In 2011-12, MVA expenditures areestimated to support the activities o the CHP(63 percent), DMV (30 percent), the Caliornia AirResources Board (4 percent), and various otheractivities (3 percent).
rece Efs  Icese DMVCsme Sevice d Eciecy
Over the last ten years, DMV has madeeorts to improve customer service and increaseeciency, so that customers have additionaloptions or renewing their vehicle registration.Tese options, which we discuss in more detail,include the use o sel-service terminals (SSs) inDMV eld oces to complete vehicle registrationrenewal transactions, the development o thebusiness partner automation program (BPA), andenabling customers to complete vehicle registrationrenewal transactions online. Te DMV has alsorecently implemented the automated customerappointment system (CAS), which allows customerscoming into eld oces to make appointmentsin advance. Figure 1 summarizes the number o  vehicle registration renewals processed in the pastour scal years using traditional options (such asmailing in renewals, coming into eld oces orauto clubs, and using telephone services), as well asmore nontraditional options (such as completingrenewals over the internet and through business
oveview  he DMV
Te DMV is responsible or registering vehiclesand or promoting public saety on Caliornia’sstreets and highways by issuing driver licenses.Additionally, DMV licenses and regulates vehicle-related businesses such as automobile dealersand driver training schools, and collects certainees and tax revenues or state and local agencies.Currently, the department provides service toover 20 million customers a year and operates313 acilities, which include customer service eldoces, telephone service centers, commerciallicensing acilities, headquarters, and driver saety and investigations oces. Over hal o all DMVacilities are customer service eld oces.Most o the department’s unding comes romthe Motor Vehicle Account (MVA), with additionalsupport rom the State Highway Account (SHA),the Motor Vehicle License Fee Account, andreimbursements. Te MVA derives its revenuesrom vehicle registration ees, driver license andidentication card ees, and a variety o miscel-laneous ees or special permits and certicates.Vehicle registration ees are the primary source o MVA revenues, which consist o (1) a base vehicleregistration ee o $43 per vehicle, (2) a CaliorniaHighway Patrol (CHP) ee o $23 per vehicle, (3) a$3 ee or the repair or replacement o high polluter vehicles, and (4) late payment penalties that vary 
Figure 1
Vehicle Registration Renewal Transactions
(In Thousands) 
Fiscal YearMailFieldOfceInternetAuto ClubBusinessPartnersPhoneSel-ServiceTerminalsTotals
2007-08 13,351 7,256 5,051 3,020 387 253 29,3182008-09 11,756 7,403 5,825 3,051 461 174 28,6702009-10 11,341 7,051 6,708 3,016 546 123 28,7852010-11 9,871 6,228 6,749 3,386 667 137 111 27,149
2012-13 Budget
partners and SSs). As shown in Figure 1, therehas been an increase in the use o nontraditional vehicle registration renewal methods since 2007-08.
In 2010-11, DMV began, and recently completed the installation o 35 reestanding SSsin high-volume eld oces. Tese terminals allowcustomers to complete vehicle registration renewaltransactions at a kiosk, rather than using DMVeld oce sta. Te terminals accept multiplemethods o payment (including cash, check, creditcards, and debit cards) and provide customerswith a printed registration card and sticker uponcompletion o the transaction. When customers usethese terminals, they have very little or no inter-action with DMV sta. As a result, these types o transaction are generally less costly than in-persontransactions. In 2010-11, over 111,000 vehicleregistration transactions were complete at SSsthroughout the state.
Under existing state law, the DMV isauthorized to contract with qualied businesspartners (such as automobile dealers, vehicledismantlers, smog test centers, automobile insurers,and rental car companies) or the electronicprocessing o certain vehicle-related transactions,including vehicle registrations, titling transactions,and issuing vehicle license plates. Since the BPAprogram began in 2003, an increasing number o businesses have partnered with the DMV. In orderto become an approved DMV business partner,a company must comply with certain require-ments. Currently, there are over 2,600 businessesthroughout the state that provide DMV services. Asindicated in Figure 1, 667,000 vehicle registrationrenewals were completed at business partnerlocations throughout the state in 2010-11. Tis is anincrease o over 120,000 transactions, or 18 percent,rom the previous year. Te cost to the state to usebusiness partners to process vehicle registrationrenewals is less because DMV does not have to pay or overhead costs related to operating a acility,such as utilities and routine maintenance.Te DMV allows business partners to chargea maximum service charge o $25 per vehicleregistration renewal, and state law requires DMVto charge the business partner a $4 transaction eeor each transaction processed through the BPAprogram. Business partners can pass the $4 DMVtransaction ee onto customers, in addition to the$25 service charge.
Online Vehicle Registration Renewals.
In April 2000, the department began allowingcustomers to complete vehicle registration renewalsonline. In 2010-11, over 6.7 million vehicle regis-tration renewals were completed online. Tere isno additional charge to customers who completetheir vehicle registration through the DMVwebsite. Similar to the BPA program, using onlineservices to process vehicle registration renewalscost less than DMV’s costs to process them at eldoces because online transactions do not includeoverhead costs related to operating a acility, suchas utilities and routine maintenance.
Currently, DMV customers can schedulea eld oce appointment prior to their visit by using the CAS process. Specically, CAS allowseld oce sta and telephone service center sta tomake appointments or DMV customers and allowscustomers to sel-schedule certain appointmentsthrough the Internet. Te department establishedthe CAS in the mid-1980s and added the onlineunction in 2001.
goVErnor’S BuDgEt ProPoSalS
Te Governor’s budget proposes total expen-ditures o $967 million (including capital outlay expenditures) to support DMV in 2012-13, which isa net increase o $17.5 million, or roughly 2 percent,above estimated current-year expenditures. Te netincrease is mostly the result o an increase in general
2012-13 Budget

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