LAO 2005 Budget Analysis: Transportation

Analysis of the 2005-06 Budget Bill

Legislative Analyst's Office
February 2005

Department of Motor Vehicles (2740)

The Department of Motor Vehicles (DMV) is responsible for protecting the public interest in vehicle ownership by registering vehicles, and promoting public safety on California's streets and highways by issuing driver licenses. Additionally, the department licenses and regulates vehicle-related businesses such as automobile dealers and driver training schools, and also collects certain fees and tax revenues for state and local agencies. The DMV operates 167 customer-service field offices statewide, as well as nine telephone service centers, a headquarters, and a number of driver safety and investigations offices.

The budget proposes total expenditures of $762 million for support of DMV in 2005-06. This represents an increase of $7 million, or 1 percent, above estimated current-year expenditures. About $410 million (54 percent) of the department's total support will come from the Motor Vehicle Account and $293 million (38 percent) from the Motor Vehicle License Fee Account. The remaining support will be funded primarily from the State Highway Account and reimbursements.

Evaluations of High-Risk Drivers Face Increasing Delays

Investigations and evaluations of potentially high-risk drivers by the Department of Motor Vehicles' (DMV) driver safety branch will be increasingly delayed absent corrective actions, thereby compromising public safety. To reduce the delay, we recommend the adoption of budget bill language directing the department to transfer the workload for evaluating certain high-risk drivers to its field offices and to report on the impact of the transfer.

State law requires motorists to hold a valid driver license in order to drive on public streets and highways. The DMV is responsible for issuing driver licenses to qualified applicants, as well as renewing expired licenses. The DMV also has the authority to suspend, restrict, or revoke the driver license of unsafe ("high-risk") motorists. These include motorists who are arrested for driving under the influence of alcohol (DUI) or have accrued a large number of moving violations (negligent operators). The largest group of high-risk drivers is comprised of drivers who may no longer be physically or mentally able to safely operate a motor vehicle, such as motorists with vision problems or diseases such as Alzheimer's.

The department's driver safety branch assesses the competence of these motorists to continue driving. The DMV operates 12 driver safety offices statewide. (These offices are separate from DMV's 167 customer-service field offices, which issue original and renewal driver licenses to qualified drivers, in addition to registering vehicles, transferring vehicle ownership, and providing numerous other services.) Driver safety staff assess potentially high-risk drivers to determine if, in the interest of public safety, adverse action should be taken against their driving privilege.

Staffing Declines While Workload Increases. Our review shows that staffing at driver safety offices has declined by about 8 percent in recent years as a result of cutbacks from hiring freezes and position abolishments. As Figure 1 shows, after peaking at about 390 personnel-years (PYs) in 2000-01 and 2001-02, staffing has dropped to 361 PYs in the current year. Most of the reduction is pursuant to Control Section 4.10, which authorized the administration to achieve budget savings in 2003-04 by abolishing positions throughout state government and reducing state operation expenditures.

While the staffing level has declined, the driver safety branch's workload has increased. As Figure 1 also shows, between 2000-01 and 2003-04 the total number of cases opened by driver safety offices increased by over 14,000 (7 percent), to 215,000. While the amount of negligent operator cases has decreased and DUI totals are relatively unchanged, overall workload has grown due to increases in cases involving motorists who may be physically or mentally unfit to drive safely (P&M). In fact, between 2000-01 and 2003-04, P&M workload increased by 20,000 cases (19 percent), from 107,000 to 127,000. Totals for the current year are expected to be even higher. Overall, P&M cases account for 60 percent of driver safety's workload, while DUI cases make up almost 30 percent. Negligent operator cases account for about 10 percent of total workload.

This combination of staffing cutbacks and workload growth has contributed to a reduction in DMV's ability to provide timely investigations and evaluations of potentially unsafe drivers, particularly those arrested for DUI violations or suspected of having debilitating physical or mental conditions.

Statutory Deadline for DUI Hearings Not Being Met; Reduces Effectiveness of the Law. Current law provides for the automatic suspension or revocation of a driver license if either (1) a chemical test indicates the presence of illegal levels of alcohol in a driver's blood, breath, or urine; or (2) the driver refuses to take such a test when so ordered by a law enforcement officer. In such cases, the officer issues the driver a notice of suspension or revocation and a temporary driver license, which is valid for 30 days. The officer then reports the arrest to DMV. (This is referred to as the Administrative License Suspension program.) After reviewing evidence related to the arrest, driver safety staff determines whether the suspension or revocation order should be sustained. This process, which is independent of the often lengthy criminal court trial pertaining to the arrest, protects the public interest by expediting the revocation of driving privileges of unsafe drivers.

If a driver wishes to contest the suspension or revocation order, statute requires DMV to hold an administrative hearing before the order becomes effective (that is, within 30 days of the arrest). If DMV is unable to hold the hearing within the 30-day time frame, the driver is permitted to drive until one can be scheduled. This protects due process by ensuring that drivers have an opportunity to challenge improper suspensions. At the hearing, the driver (or representative such as an attorney) has a right to challenge and present evidence and witnesses in order to contest the suspension or revocation order. The driver safety branch ultimately reinstates licenses in approximately one-fourth of these hearings.

The DMV's ability to meet the statutory deadline for administrative hearings has continued to decline in the past few years. As Figure 2 shows, in 2003-04, only 8 percent of hearings were held within 30 days of arrest. This is down from 17 percent in 2000-01. The average length of time before a hearing could be held in 2003-04 was 53 days, compared to 46 days in 2000-01. Such delays undercut the purpose of the law, which is to protect public safety by facilitating the timely removal of dangerous drivers from the roadways, and reduce the law's effectiveness.

Department Uses Efficiencies and Overtime to Reduce Delays in DUI Hearings. In response to staffing cuts in 2003-04, the driver safety offices implemented several administrative efficiencies to reduce workload and delays, including eliminating the need for staff to write detailed reports when reinstating driving privileges and corresponding with drivers more by telephone rather than by mail. In addition, DMV recently began requiring most driver safety office staff to work overtime in order to reduce delays. According to data provided by the department, in December 2004, 250 staff worked a combined 4,300 hours of overtime (an average of about 17 hours per employee). As a result of these efficiency and overtime measures, the average wait time in that month to schedule a DUI hearing has been reduced to 39 days.

The DMV plans to authorize overtime for staff through the remainder of the current year by redirecting funds from various operating expense and equipment allotments. The department has not made a decision regarding the use of overtime in the budget year, but has not requested any additional funding or staffing for the program. However, without continued use of overtime or additional staff, DMV estimates that the average time frame for hearings will increase to over 60 days in 2005-06—twice the statutory requirement.

Mixed Performance for Reexaminations of Motorists Who May Not Be Physically or Mentally Able to Drive Safely. As noted earlier, the majority of driver safety offices' workload involve P&M cases. The driver safety branch receives written referrals from peace officers, medical professionals, family members, and other individuals requesting that DMV reevaluate a driver's physical or mental ability to safely operate a motor vehicle. In most cases, the referred driver must schedule an appointment with driver safety staff for a reexamination. The reexamination process usually consists of a review of the motorist's driving and medical history by a hearing officer, as well as an evaluation of the driver's performance on a supplemental vision, written, and drive test. Based on the results of the reexamination, the driver safety officer makes a decision as to whether a motorist's driving privilege should be restricted, rescinded, or left intact.

The driver safety branch conducts two types of reexaminations: regular and priority. Priority reexaminations, which account for about 5 percent of reexaminations, are conducted at the request of law enforcement personnel who believe that a motorist's mental or physical condition may be impairing his or her ability to drive safely. Under current law, a law enforcement officer issues the driver a priority reexamination notice, which requires the driver to contact a driver safety office within five days. A hearing officer must meet with the driver by the following business day after contact for an initial interview and evaluation. The DMV automatically suspends the license of motorists that fail to contact a driver safety office within the five-day deadline.

The DMV indicates that, unlike the situation with DUI cases, the driver safety branch is currently in compliance with the statutorily required time limit for priority reexaminations. This is because DMV considers those drivers who are referred for priority reexaminations to be the greatest potential risk to the public, and thus requires staff to redirect resources and efforts to handle incoming cases in a timely fashion.

Regular reexaminations can be triggered by referrals from persons such as the driver's doctor, family, or neighbors. Medical professionals must report patients' lapses of consciousness to driver safety staff, as well as persons who are recently diagnosed with diseases such as Alzheimer's or other forms of dementia. Others such as friends or family of a motorist may contact a local driver safety office when they observe the motorist driving in an unsafe manner.

In contrast to priority reexaminations, there is no statutory time limit on DMV to hold regular reexaminations. Instead, referred drivers are scheduled for a reexamination as appointment slots become available, which may take over a month. During this scheduling period, motorists are permitted to drive. The average number of days before driver safety staff can schedule a regular reexamination increased every year between 2000-01 and 2003-04, from 35 days to 42 days. As a result of DMV's authorization of overtime for staff, driver safety offices were able to reduce the average reexamination time frame to 19 days in December 2004. The department indicates, however, that without continued use of overtime or additional staff in the budget year, this average will likely increase to over 50 days in length.

DMV Should Transfer Negligent Operator Workload to Field Offices. As noted earlier, DUI and P&M cases account for about 90 percent of driver safety offices' workload. Negligent operator cases account for most of the remaining workload. Under current law, motorists that accrue an excessive number of moving violations or cause multiple traffic accidents within a certain period of time automatically receive written notification from DMV that their driving privileges will be suspended or revoked within 30 days. These drivers have a right to request a hearing with a driver safety office in order to contest the suspension before it goes into effect.

According to the department, negligent operator cases are the most straightforward cases handled by driver safety offices. Unlike DUI hearings, for example, negligent operator hearings usually do not involve attorneys or witness testimony. Moreover, while P&M reexaminations can require hearing officers to understand technical medical records in determining the fitness of motorists to drive, negligent operator cases typically consist of no more than a review of the motorist's driving record and a questionnaire concerning the motorist's driving habits. For these reasons, new hearing officers can be trained to handle negligent operator cases in just two weeks, as opposed to more than six weeks of training required for DUI and P&M cases.

Given these key differences between cases, our review suggests that the department can make a more efficient use of its resources by transferring responsibility for negligent operator cases to DMV's customer-service field offices. In so doing, workload for the driver safety offices would be reduced by about 21,000 cases, or 10 percent of total workload, thereby freeing up driver safety staff to focus on more complex workload involving DUI hearings and P&M reexaminations. Mid-level staff at the customer-service field offices, such as first-line managers or senior motor vehicle technicians, could be trained and assigned to handle negligent operator cases. Since negligent operator workload would be assumed by up to 167 offices, the impact on field office staff would be spread across many locations—an average of 125 cases annually per field office.

Thus to make a more efficient use of departmental resources and to reduce the driver safety offices' workload, we recommend that the Legislature adopt budget bill language directing the department to transfer the responsibility for negligent operator cases to the customer-service field offices and to report as part of the 2006-07 budget on the workload impact of the transfer.

The following budget bill language is consistent with this recommendation.

The Department of Motor Vehicles shall transfer the workload associated with negligent operators from the driver safety offices to the customer-service field offices. As part of its 2006-07 budget submittal, the department shall provide information on the impact of the workload transfer on (1) customer-service field offices and driver safety offices, and (2) the delays in the evaluations of driving-under-the-influence cases and the reexamination of motorists who may be physically or mentally unfit to drive safely.

DMV Should Continue Staff Overtime If Needed. Our review also finds that overtime for driver safety staff has been an effective and relatively cost-efficient way for DMV to reduce delays in scheduling DUI hearings and P&M reexaminations. We find that the average amount of overtime per employee (about 17 hours per month, or 4 hours per week) is limited enough that it does not unreasonably burden staff. Moreover, while the department pays one and one half times employees' regular salary for every hour of overtime worked, other costs such as for additional benefits and facilities are minimized. 

Given DMV's success at reducing waiting times by the use of overtime, we think that the department should continue this practice in 2005-06, if needed. With the transfer of the negligent operator workload to customer-service field offices, more staff will be available in driver safety offices to handle DUI hearings and P&M reexaminations.

Newly Identified Mandate Review

Chapter 1124, Statutes of 2002 (AB 3000, Budget Committee), requires the Legislative Analyst's Office to review each mandate included in the Commission on State Mandates' (CSM) annual report of newly identified mandates. In compliance with this requirement, this analysis reviews the mandate entitled "Administrative License Suspension Mandate."

Administrative License Suspension Mandate

State law requires a law enforcement officer (state or local) to immediately confiscate the driver license of a person arrested for driving under the influence of alcohol. The officer issues the driver a notice of suspension or revocation and a temporary driver license, which is valid for 30 days. The officer is then required to submit the driver license, a copy of the notice of suspension or revocation, and a written report regarding the circumstances of the arrest to DMV. After reviewing evidence related to the arrest, DMV determines whether the order of suspension or revocation should be sustained.

In August 2002, CSM determined that these activities by local law enforcement agencies on behalf of DMV are a state-reimbursable mandate. In December 2004, CSM estimated the statewide cost of this mandate to be about $10 million (for total costs incurred from 1997-98 through 2004-05). The estimate is based primarily on the salary and benefits costs of the employees performing activities on behalf of DMV's license suspension program, particularly the time for officers to complete and submit required documents.

The administration proposes to provide $10 million in 2004-05 to fund the cost of this mandate through the current year, as well as $1.5 million in the budget year.

Mandated Cost Reasonable

Based on our review of the activities and estimated costs of the program, we recommend that the Legislature reimburse local law enforcement agencies for the mandated costs of the administrative license suspension program.

We believe that funding of the license suspension mandate as proposed by the administration is justified. The program protects the public interest by allowing DMV to suspend the license of motorists arrested for drunk driving, and the cost estimate seems reasonable. Accordingly, we recommend that the Legislature fund this mandate. Funding would come from the Motor Vehicle Account.

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