Long-awaited Nevada DMV modernization likely delayed, may cost $300M more

One month after Nevada DMV officials said that the long-awaited project to upgrade the agency’s antiquated computer systems was on track and within budget, the agency now says the plan will likely take three more fiscal years and cost $300 million more than originally anticipated.

In March, agency officials told lawmakers that the project to revamp its online presence (including a new appointment system and platform to submit vehicle titles electronically) was “on track and within the approved budget.” This latest iteration of the modernization project began in 2021, and was expected to cost $125 million and be completed by September 2026.

But earlier this month, agency officials told legislators on the Interim Finance Committee (IFC) that the project cost had likely ballooned to around $425 million and would not be completed until fiscal year 2029 — a three-year delay. DMV officials said the change was because they recently determined that their IT staff was not equipped to implement some of the changes on top of their existing jobs, requiring the agency to shift those responsibilities to an outside contractor in a move that would cost more money and take more time.

The DMV declined an interview request, but provided written answers to The Nevada Independent’s questions through a spokesperson. The agency noted that the modernization project is 20 percent complete, and that it has not officially requested additional funding from state lawmakers and has only informed legislators of an early projection of future funding requests.

Members of the IFC, a group of lawmakers that meets when the Legislature is not in session to make various funding decisions, said they were confused and frustrated by the sudden change.

“To find out that we are not only one fiscal year behind but three fiscal years behind the timeline that we were originally looking at and again that we are not in our approved budget … it definitely comes as a surprise,” Assemblyman Howard Watts (D-Las Vegas) said at the IFC meeting.

Assemblywoman Daniele Monroe-Moreno (D-North Las Vegas) said the March testimony provided by the agency was “drastically different” than what it said in April, and “the state does not have an endless bucket of money to put into failed projects.”

“It’s kind of hard to … talk to our constituents and say, ‘Well, we’re not going to be able to maybe fund a social service need that a senior may have or a foster child might have or homeless [person might have] because we’re putting money into this,’” she said at the IFC meeting.

An earlier effort to revamp the DMV’s computer systems (which are run by antiquated technologies including PowerBuilder and COBOL) began in 2015, when legislators approved a $1 “technology fee” assessed on all customer transactions to help fund a five-year system modernization project.

A 2018 state audit found that the contractor was months behind schedule, providing inadequate staffing levels and missing deadlines for project documentation. Despite spending close to $30 million, the state terminated the contract in early 2018.

The modernization effort eventually restarted in October 2021, and the DMV and an outside contractor began completing deliverables six months later with the hopes of completing the project within four years.

Then-DMV Director Julie Butler told lawmakers last year that the plan to complete the project in four years was “aggressive,” and that this kind of project usually takes eight years instead of four, but that she “knew there was no way this body would stand for us dragging this on for eight years.”

Asked by Watts in a March 2023 legislative budget meeting if the agency could get the project completed within that timeframe if it was provided with the “necessary resources, and not bogged down with additional tasks,” Butler said it could.

Legislators in 2023 ultimately approved allocating $73 million in state transportation funds to the DMV to continue with the modernization effort over the next two years.

At this month’s IFC meeting, DMV Director Tonya Laney (Butler retired in March) argued that the project is not behind schedule, just at the upper end of the estimated completion time.

“The original estimate of the eight years is the new estimate,” Laney said.

DMV officials said at the IFC meeting that they realized after testifying at the March meeting that the their IT staff could not complete everything asked of them, which is why their March testimony indicated the project was on track and within budget.

“(We) were banking on having our IT staff learn, build, and develop this new system while they kept our old system running,” read the DMV’s response to The Indy’s questions. “This wasn’t feasible with the workloads that our IT professionals are carrying right now.”

Butler told legislators last year that the DMV selected a contractor with expertise in migrating from legacy computer systems to upgraded systems to ease the agency IT staff’s workload, saying it “would be too difficult to learn the new system and attempt a data migration simultaneously.”

An official from a third-party group monitoring the project’s progress also said the revised contract through fiscal year 2029 will not include deadlines for the contractor to complete certain tasks, but said that the project management team is independently tracking the progress. Legislators said they were concerned with that arrangement.

“There is nothing to assure us in any way that this extra, almost $300 million, will get this job completed by 2029 because there’s nothing to tie your contractor’s hands to make sure that it’s done,” Monroe-Moreno said.

Rollout changes

There were signs months ago that the project wouldn't meet the ambitious deadline the former DMV director vowed to meet.

In November, the group monitoring the project’s progress reported that the project's completion may need to be pushed back multiple years and that the baseline budget “has very little room for any additional rework, changes, or errors” in part because of changes in the rollout plan.

The DMV originally anticipated rolling out new features to the public every six to eight weeks, but employees had discovered that it would take longer to build out some of the system’s new components, Laney said at the April IFC meeting. As a result, the project is still rolling some parts out incrementally but at a slower pace.

The project is also planning to roll out major components together under a “Unified Release,” rather than releasing everything incrementally, which the external report said would allow the DMV to manage and test technology before it is implemented.

The agency has rolled out some features to the public, including a tool that allows people to take written driver’s license tests from home and a new appointment system.

— This story is used with permission of The Nevada Independent. Go here for updates to this and other Nevada Independent stories.