MNLARS no more: State officials agree to scrap system, start over

ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz and lawmakers from both parties agreed Wednesday to scrap the state’s vehicle registration system and start over with privately developed software, a move that could cost $86 million.

Spending that amount would push the total cost related to the Minnesota License and Registration System, known as MNLARS, to nearly $200 million. Taxpayers have never gotten what they paid for. Ever since the system was rolled out in September 2017, drivers have faced delays with vehicle title and registration requests.

When Walz and lawmakers authorized spending on short-term fixes this year, they also launched an independent review to determine the long-term viability of MNLARS. That independent review, released Wednesday, recommended a total makeover.

“If we’re going to fail, fail fast and fix it,” Walz told reporters during a news conference. “Save money for the taxpayers and get this thing on the right path. We’ve been dying a slow death for 12 years here – certainly over the last two years – and it doesn’t make sense.”

State officials insisted that privately developed software, which 12 other states use, would fix Minnesota’s problems. They also said drivers would not be affected during the transition.

While lawmakers and Walz agree on the independent review’s recommendations, they still must approve the changes in state law. Budget negotiations are underway in the Legislature, and the MNLARS replacement will be one more major issue to deal with.

“Please give us a chance,” said state Sen. Scott Newman, the Republican chairman of the Senate Transportation committee and a longtime critic of MNLARS. “For the first time in a very long time, I honestly feel that we see the end of the tunnel.”

Taxpayers dumped more than $100 million into MNLARS from 2007 through 2018, according to an Office of Legislative Auditor special review conducted earlier this year. Then, Walz and lawmakers authorized an additional $13 million on short-term fixes in March.

Replacement software could cost $86 million to develop, implement and operate in the short-term, the independent review estimated. That includes $60.5 million for implementation and $25.2 million to run the software for two years.

Walz said it would prove more costly to keep updating MNLARS. In addition, the current system still doesn’t work for complicated driver requests and doesn’t support technological advances, such as self-service, state officials said.

“We’re going to put a little more (money) on the front end, but over the long-term length of this, the cost savings should be better,” Walz said.

Rick King, a Thomson Reuters executive, led the four-person independent review. King’s team recommended that the state continue to update MNLARS through June and then freeze any new development.

The state should then hire a private software developer, which could have the new system ready to go within 16 months, King said. He said drivers should not notice a different in the meantime.

“I think you’ll be able to get license tabs just the way you get license tabs today, so that’s not going to be a disruption,” King said.

Not included in the cost of replacement software were reimbursements for deputy registrars, the workers who handle drivers’ vehicle requests. Lawmakers are considering separate legislation to provide $10 million to the deputy registrars for extra costs they incurred because of MNLARS’ failures.

To read the full report, click here.

Statement from Gov. Walz:

“I’m committed to fixing Minnesota’s Vehicle Licensing and Registration System,” said Governor Walz. “That’s why I reached across the aisle to bring people together to find a solution. Minnesotans don’t care how they get their license plates or tabs, they just want them on time and error-free. My administration will continue to make state government as efficient and accountable as possible.”

“We are confident that rapidly licensing a packaged software solution will provide all the functionality available today in MNLARS, as well as the benefit of the knowledge and expertise of the package software providers already serving many other states successfully,” said Independent Expert Review Chair Rick King.

“People, process and technology are inextricably linked in the proper delivery of the driver and vehicle services that Minnesotans expect and deserve. This report provides a clear path forward for the acquisition of the technology that, with proper DVS staffing, will lead us to a first-rate system, and will address the process improvement concerns of deputy registrars, auto dealers and the public,” Department of Public Safety Commissioner John Harrington said. “The public-private partnership outlined in the report will drive us to keep up with the advances in technology and keep our systems up-to-date so that we can provide the digital experience Minnesotans should expect. I look forward to working with the legislature to secure the necessary and ongoing funding to implement the recommendations of this report and continue our progress in addressing deficiencies of previous Legislative Auditor reports.”

“The replacement of aging IT systems presents a significant opportunity to evolve how we deliver services to Minnesotans,” MNIT Commissioner Tarek Tomes said. “When a mature vendor marketplace exists with critical customer mass, it provides the most opportunity to leverage the investments of other states and bring innovation to bear for the benefit of all Minnesotans. While this path will require more investment in the short-term, it will best position the state to meet not only current but future needs.”

As stated in the report: “While this recommendation drives incremental cost in the short-term and causes disruption with another cutover, it is the lowest risk path to a solution that is expected to more fully meet the long-term needs of all stakeholders, in part because of the opportunity to leverage features, functionality and best practices from other states that use the same software.”