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DMV Computer Disaster - RI Pays the Price

Friday, April 29, 2011

 

Rhode Islanders have been paying millions of dollars for a new Department of Motor Vehicles computer system since 2007, but it has yet to even go on-line.

The state charges a $1.50 fee on every transaction conducted by the DMV, such as license and registration fees, which is raising $1.9 million per year – to date nearly $10 million – for a system that still isn’t ready for use.

Frustration With Delay

“We are concerned and frustrated that it is not up and running,” said Rosemary Booth Gallogly, Director of Revenue for the state. “There were early snags, with both project management and accountability.”

“There were continuity issues (with the vendor),” said Gallogly.  “We initially gave it to Saber (Technology), which was sold to EDF, which in turn was purchased by Hewlett Packard.”

History of Fees

The history of the computer fund began in 2006, when the General Assembly approved the fee, and in 2007 collection was authorized, and people doing business with the DMV began paying the $1.50 charge woven into their overall costs.

According to Gallogly, the average annual revenue since 2007 has been approximately $1.9 million per year coming into the DMV.

In 2009, the state took out an $11 million certificate of participation bond, based upon the money generated in the first two years of the new fees.  The bond’s debt service is $1.85 million per year, and it will be paid off in 2017, at which point the restricted receipt fee fund will end, said Gallogly.

The original end date of the bond was July 2014, but the state was granted an extension for three more years.

The computer system itself is a very ambitious one.  One of the key features both desired and needed is a centralized database. DMV had separate databases for licenses, registrations and other elements, so that where it may have said “Jim Smith” on one’s license, the car might be registered to “James Smith,” causing confusion in paperwork.

Finances Fine at the Beginning

Gary Sasse, former Director of the RI Department of Administration and Director of Revenue under former Governor Donald Carcieri, said the funding policy is sound, but the delay in the project completion is just causing the state more money.

“The system was set to be ready by the opening of the new DMV building in late 2010,” said Sasse, “But now the project is over budget and past due.”

And as is evident from recent media reports on the supposedly new, improved DMV, you still spend the better part of a day getting served using the old system.

“We need to ask how much more will it cost than originally budgeted, what’s the best estimate of completion, and how can we hold the vendor accountable, if necessary, and for what?”, said Sasse.

Still No Timetable

What is the projected finishing date, after four years have already gone into the process?

“I can’t give you that,” said Gallogly. “We are still working with HP on the modules.”

Some of the work with Hewlett Packard is to make the system more customer-centric. An example is that one new feature will be the ability to use a credit card for all DMV transactions. Currently, credit cards can only be used for on-line car registrations.

Staff Training Takes Time

Gallogly said, “The new system is very complex; it’s not off-the-shelf.  We are trying to make sure the staff is ready to use it.  It took some of them a long time to pull away from paper.”

Part of the time spent in DMV staff training was created by DMV’s recent policy of closing on Wednesdays, and that time was used to teach employees about the new system.

On the IT side, DMV teams were pulled together to work with the vendor, some on loan from the Department of Administration, Gallogly recalled from her days as DoA director.

Costs Are Rising

The total cost of the system will be at least the $11 million projected, but it has been increased by ancillary costs with vendors other than Hewlett Packard.  These involve integrating and cleaning up the databases of outside (non-State of Rhode Island) groups, and for equipment, such as specialized cameras to take license photos.

Whose fault is it that the project is being delayed and using up the ongoing fee revenues?

“I hesitate to get into accountability because that is when the lawyers dig in their heels on both sides,” Gallogly explained. “But we’re confident we have things in place.”

Due Diligence

No specific accusations have been made as to why the system is still in limbo.  Many of the delays can be put down to early lack of infrastructure capacity of the state and changing vendors over time, according to a person familiar with the project’s history.

“We have been very diligent in working with HP,” said Gallogly.  “We think we have protected the taxpayers in this instance.”

The Revenue director then said that for any specifics in current accountability, she would have to “refer to the (Department of Administration) lawyers.”

(A request for information on the project made by GoLocalProv to the chief communications officer at Hewlett Packard’s Palo Alto, CA corporate headquarters had not been responded to by publication time.)

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