Remove ImagesDMV office next on Fox’s wish list
December 15, 2011
Guilford County officials have recently been exploring taking on all sorts of services and duties the county has never handled before. For instance, in the last two months, county officials have had serious preliminary discussions about creating a countywide fire department as well as starting up a Guilford County parks and recreation department – even though the county has no experience in those areas.
Now citizens who are keeping track can add another venture to the list of potential new county operations: Guilford County staff has begun the process of opening and running a state-authorized license tag office in the Independence Center at 400 W. Market St. in downtown Greensboro.
A license tag office would be a completely new business for Guilford County government, and it would mean hiring about a half-dozen new county employees to provide a service that's handled by private companies in almost every other county in the state.
It would also mean that Guilford County government would be in direct competition with the two privately owned license plate offices currently operating in the county.
If the thought of combining the efficiency track record of Guilford County government with the customer service reputation of the NC Department of Motor Vehicles (DMV) seems disturbing to you – well, it also seems that way to at least one Guilford County commissioner.
Commissioner Billy Yow said that, though the idea hasn't been presented to the Board of Commissioners yet – or even discussed publicly – the project is already clearly being fast-tracked by Guilford County Manager Brenda Jones Fox, Tax Director Ben Chavis and other county staff.
In fact, Yow said, Guilford County is really getting ahead of itself when it comes to the license plate office, because county staff has already picked out the location and has applied to the state for the authority to run the office. The county has even already been certified by the state to provide the service.
The two existing license plate agencies in Guilford County are at 1677 Westchester Dr. in High Point and in Guilford Shoppes Station, at 5551 W. Market St. in Greensboro. A third office, at Golden Gate Shopping Center, shut its doors earlier this year.
The State of North Carolina has a long list of rules and regulations that operators of license tag offices must follow, and Yow said that's only one of the things that makes it a difficult business to be in.
"Ben thinks we can make a profit because we won't have to pay rent," Yow said, adding that county office space isn't free since it has to be heated, cooled, cleaned, maintained and paid for. The Independence Center was purchased by the county, not gifted to it.
Also, Yow said, Guilford County plans to pay its tag agency workers much higher wages than employees in similar jobs at privately run tag offices across the state.
"They're talking about hiring five employees at $48,000 each and a supervisor making $68,000 a year," Yow said.
He said he thinks there are many potential negatives Fox and Chavis haven't taken into account.
For instance, Yow said, there's the fact that the county knows nothing about running this type of office, and, he added, using the Independence Building for that purpose would mean taking a significant number of parking spaces from county employees in an area where parking is scarce.
Parking around the Independence Center will no doubt be in even shorter supply once the county's giant new jail in downtown Greensboro becomes operational early next year.
Yow also said he doesn't like the way the plan to open the office has been moving forward so aggressively with zero input from commissioners.
He said he had no idea county staff planned to do this, and then, he said, suddenly, out of the blue, he heard Guilford County had been approved by the state to open a license plate office.
A letter dated Tuesday, Nov. 29, from the NC Department of Transportation to Fox stated: "Dear Ms. Fox: You have been selected to operate the Guilford County License Plate Agency (LPA) in Greensboro, North Carolina. We will provide you with the LPA contract, SOP [Standard Operating Procedures] and Equipment Lease Agreement for your signature at a later date … Ms. Fox, your management and customer service experience will be an asset for your continued success as a newly Commissioned Contractor. We look forward to working with you and we pledge our support in assisting you in this endeavor."
The letter was signed by Donna Boone, an administrative officer for the Vehicle Services Section of the NC Department of Transportation.
Fox responded later that day.
"Ms. Boone," Fox wrote in an email, "Thank you so much for the contractor notification letter selecting Guilford County to operate the License Plate Agency (LPA) in Greensboro, NC. We look forward to receiving the documents from you and will be in touch with you soon regarding the site approval process."
The state's response sounded, at least, as though state officials felt Guilford County staff wanted to move forward quickly with the project. An email from Boone stated, "Once you are able to provide a location address and determine the opening date we will date and mail the SOP and contract for signatures. The original letter will be mailed to you as well; however, I did want to expedite this notification. Please let me know when you would like to start the site approval process and if you have any questions please do not hesitate to contact me. I look forward to working with you and Mr. Chavis."
While Yow clearly doesn't like the idea, Fox and Chavis say they think a county-run license tag office can become a real revenue generator.
Commissioner Paul Gibson said he has absolutely no idea whether it's a great move or a terrible one for Guilford County. However, Gibson said, either way he wished he'd been kept apprised of what has been going on behind the scenes.
Gibson said he was surprised to learn the plan was moving along full-steam ahead yet no one had bothered to tell the commissioners.
Gibson said he only happened to learn of the staff's plans to open a license plate agency when it came up in an informal conversation with Chavis before a county commissioners meeting.
"Ben said something to me about applying for approval," Gibson said.
Other commissioners apparently only learned about the county getting into the license plate office business later, after Fox sent a memo informing them that the county had been accepted by the state as a qualified provider of the service.
Gibson said that, recently, he had spoken with Yow about the possibility of the county opening a license plate office, and Gibson said Yow knew an operator of a license plate office in another county. Gibson said, based on discussions with Yow, he learned that there was an impressive amount of red tape and supplemental expenses that make the license plate agency business very challenging.
Gibson added that, so far at least, the county commissioners have been presented with virtually no information.
According to the Guilford County clerk to the board's office, a presentation on the matter is in the pipeline; the item is expected to be on the agenda for the commissioners' first regular meeting of the new year on Thursday, Jan. 19. (The board will hold its annual retreat on Tuesday, Jan. 10; however, the commissioners aren't expected to address the license plate office proposal at that retreat.)
Chavis said the reason the issue hasn't been brought to the commissioners yet is because it's still in the preliminary stages. He said nothing will happen without the approval of the Board of Commissioners.
"There are several steps; we've been meeting with the DMV right now," Chavis said.
While Chavis hasn't made a presentation to the Board of Commissioners, he has drawn up a list of reasons why he believes it would be beneficial for Guilford County to operate a license plate office in Greensboro. Upon request, he sent a copy of that memo to The Rhinoceros Times.
One reason Chavis states is that the county could offer a "higher level of customer service" to county residents. Chavis said that's because Guilford County has "a greater vested interest" than a private company does in giving good service.
"We are confident that we can provide better customer service than the public generally gets at License Plate Agencies under the current program," Chavis stated in his memo.
Chavis seems convinced that government could offer better service to clients than private providers, but government operations, like the post office to take just one example, aren't exactly known for their sparkling customer service reputations.
Also according to that memo, in more than 30 states, both motor vehicle tag registration fees and local property taxes are collected through the tax department or tax collector's office.
Chavis' memo also argues that the move would help Guilford County "take ownership" in collecting and correcting DMV, tax and address data – which, Chavis said, will help ensure that all jurisdictions get their due revenue.
Anyone from any county in North Carolina can get a license plate renewed in any other county in the state. The fee paid is then sent to the state and later distributed to the county where the vehicle is registered. (If Guilford County opens a license plate office, all the money the office collects would be sent to the state for at least 30 days and then Guilford County's cut would be returned to the county.)
Chavis argues that there are other advantages as well.
"Internal Audit Controls will be available not only through DMV but through our own Internal Audit Department," his memo states.
Part of this move, Chavis said, has been spurred by new state legislation that will take effect in just over a year and a half. Starting July 1, 2013, the North Carolina DMV will collect property taxes on automobiles at the same time it collects license plate registration and renewal fees.
After that date, county tax departments across the state will no longer collect registered motor vehicle property taxes. Chavis said one reason the new state law was put in place was so customers would be able to have one-stop shopping when paying vehicle taxes, registration fees and getting their plates renewed. No longer, he said, will vehicle owners have to go to both the county Tax Department and the DMV to pay taxes at the time of vehicle registration. Of course a customer could always mail in both their tax payment and their license plate renewal forms and payment.
Chavis said a lot of money is involved.
"The annual levy for registered motor vehicles among all jurisdictions we collect for is $41.9 million," Chavis stated in his memo. "Obviously we have a big stake in how HB 1779 [the new state legislation] is administered at the local level."
Even if the idea is as good as Chavis and Fox seem to think it is, they still have to convince at least six commissioners – and that could be a hard sell.
Yow said Chavis and Fox don't understand all the risks involved and the problems that could come with operating a license plate office.
Yow said Chavis had told him the license plate office would lose money during its first year of operation but make money after that. However, Yow said, many of the financial variables are still unknown, so there's no way at this point to know if the office would be a money maker. Yow said it could turn into a big money hole for the county.
Yow said the county would have to spend thousands of dollars to train the employees, which is just one of the requirements of opening an office.
According to Yow, the state requires five employees present in a license plate office whenever it is open.
"I said, 'Ben, what are you going to do when someone gets sick? That means you have to hire one or two other people as well to fill in,'" Yow said.
Yow added that hiring new employees also meant providing retirement programs and other benefits to those employees.
Yow said there was no agreement yet on how much the state would pay Guilford County for the various services it performs at the proposed license plate office.
"When I asked Ben, 'What are they going to pay you per transaction?' Ben said, 'I don't know,'" Yow said.
Yow added that one of his biggest concerns was the parking issue.
"It's going to mean more employees are put out of their parking places," Yow said.
Yow said he had brought up that issue to Fox, and the manager reminded him that county employees are not promised parking when they take a job with the county. However, Yow said, it should still be a major concern any time the county is going to take away a large number of employee parking spaces.
Yow said that, if a private business owner or developer goes to the Guilford County Planning and Development Department to get a building permit, one of the first questions planners ask is, "What about your employee parking?"
Gibson said he shared the concerns about parking in the area around the Independence Center.
The state has strict rules about how many parking places a vendor must offer customers at license tag offices.
Yow said he also didn't like the fact that Guilford County would be competing with private industry. He said that could open the door for unfair competitive practices.
Guilford County Attorney Mark Payne said that, while it's unusual for municipalities in the State of North Carolina to be in the license plate business, it's not unprecedented. Payne said it's his understanding that seven counties in the state and seven cities currently contract with the state to run license plate offices.
Payne said the private companies have contracts with the state, and they all must follow a set of standard operating procedures.
Payne also said that not all contracts with the state are boilerplate; he said contracts with the state can vary from county to county even if they are for similar services.
"The state can say to one county, 'Well, we'll work with you on this issue,'" Payne said.
It's not yet known if the commissioners will be asked to vote to open the license tag office at their Jan. 19 meeting, or whether they will merely hear a presentation, discuss the matter and then take a vote at a later date.
One concern Yow did not bring up is that the license plate offices across the state seem to frequently be in trouble for mismanagement, criminal acts or a failure to follow state rules. In fact, the license tag office at Golden Gate Shopping Center was closed down in September due to allegations of fraud.
The county has tried to make money before in interesting ways – for instance, years ago Guilford County attempted to make money holding state prisoners at the county's Prison Farm and charging the state for doing so. However, that endeavor failed miserably.