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Hearings reveal range of MNLARS problems facing lawmakers

ST. PAUL—Amid the continuing fallout from Minnesota's troubled new computer system for vehicle titles and license plates, lawmakers this week grappled with several sticky issues.

• License centers are hurting — and they say they need a lot more money than lawmakers are proposing.

• Information technology officials are under fire for a $2.5 million office reorganization while they were pleading for money to fix the system.

• Some lawmakers want to force the state's IT agency to bid out new computer programs — but IT officials say they already do that when they can.

None of this would be happening were it not for the universally acknowledged failures of the $93 million computer system, known as MNLARS (Minnesota Licensing and Registration System).

Since it was rolled out in July, the system has been beset by shortcomings, some of which might take years to fully resolve — and tens of millions of additional dollars. Gov. Mark Dayton and lawmakers agreed to a roughly $10 million transfer of funds last month, and Dayton and IT Commissioner Johanna Clyborne are requesting an additional $33 million to get the program working as it should by Fall 2019.

The situation has frustrated many, from lawmakers to license center workers.

License centers hurting

For the legions of deputy registrars who operate license centers where people go to get their tabs and titles, MNLARS has been crushing, they say.

There's so much more work, and everything takes so much longer, that the South St. Paul center is only processing transactions at half the rate of pre-MNLARS, according to Gaye Smith, the center's manager.

Such operations, by law, only make money — to pay rent, utilities and employees — via a cut of the various fees associated with tasks like renewing a tab or getting a duplicate vehicle title. In past years, her center averaged $500,000 in total fees collected. Now, it's on pace for about $250,000.

Several lawmakers have proposed creating a $10 million fund for license centers, as well as auctioneers, auto dealers, and other businesses that have similarly been forced to pay workers overtime to get once-routine tasks accomplished.

Will $10 million be enough?

Not even close, Smith told a panel of state senators Wednesday.

"The $10 million won't even make us whole," she said. "It will not make us stay in business moving forward."

According to Smith and a group that represents deputy registrars, the immediate need is for more like $25 million to $30 million.

Several lawmakers soberly said they'll take that into account as they consider how to proceed.

Cubicle controversy

MNIT, the state IT agency, came under fire this week for spending $2.5 million to reconfigure its office space while at the same time pleading for more money to hire computer programmers to fix MNLARS.

For some lawmakers, the story, which was first reported by KSTP-TV, made MNIT look like an agency with its priorities out of whack.

Turns out the reconfiguration wasn't a posh upgrade, but rather a consolidation of IT workers who had been spread across state agencies, a vestige of the nascent days of state IT, before MNIT was established. Clyborne and Jon Eichten, MNIT's legislative director, said the project was really a cubicle-cramming exercise in the state-owned Centennial Office Building, shrinking the space for each worker by about a third as part of an effort to save about $483,000 a year moving forward.

The $2.5 million comes from a complicated state leasing program and is actually borne by other agencies for which MNIT provides IT support. It would have been illegal to divert that money for MNLARS programmers, they said.

Nonetheless, several Republican lawmakers, including House State Government Finance Committee Chair Sarah Anderson, R-Plymouth, said she wasn't satisfied.

IT: In-house or outsource?

MNIT has been under intense scrutiny not just for MNLARS, but also MNsure, the software that supports the individual health insurance market. MNsure also had a botched launch — and, like MNLARS, it was developed in-house by MNIT employees and independent contractors.

Rep. Jim Nash, R-Waconia, has been leading a push to require MNIT to seek private sector bids on any future software development project.

His logic: MNIT has a bad track record, and reinventing the wheel might not be necessary. For example, after it became apparent the state wouldn't be able to meet an October deadline to develop a new driver's license system in-house, it decided to contract with a company that's doing the same software for dozens of other states similarly trying to comply with federal Real ID standards.

But Clyborne said Nash's notion is overly prescriptive and would force the agency — often unnecessarily — to navigate complex state contracting laws, causing more delays and costing more money.

She also said the state already does an in-house-vs.-bid-out analysis with every major project. And in the cases of both MNLARS and MNsure, it did bid out the projects. IT officials concluded those private companies were failing to deliver, so they terminated the contracts and took them on in-house.

Missed opportunity?

An odd moment of anticlimactic drama played out Tuesday, when Paul Meekin, a central MNLARS figure who was fired as a result of the project, surprised members of a joint House committee by asking to testify in a hearing.

Meekin has not faced lawmakers since the whole MNLARS thing blew up.

After a brief statement defending himself as just one person in a much larger system, he stood for questions.

No lawmaker asked any. Meekin walked out.

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