Interim Roads and Transportation Committee

October 8, 2015

Meeting Agenda

• BMV Foundation and Vision• Agency Initiatives• Legislative Initiatives• Wrap up• Questions

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Commissioner Kent Abernathy• Grew up in Jay County• Graduated West Point - served seven years as officer in U.S. Army• Over 15 years experience in the corporate banking industry in New York and

Indianapolis• Vice President – managed all aspects of corporate banking relationship of

business clients in a broad range of industries• Volunteered to return to active military duty

– September 2003 to December 2009– leadership positions at the Pentagon in Washington, D.C. and Baghdad

• January 2010 joined the administration of Governor Mitch Daniels as Chief of Staff for IDEM

• Appointed BMV Commissioner by Governor Mike Pence in February 2015

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Did you know?

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132 license branches

1,400 BMV/C associates

12.5 million transactions a year

2 million calls to Contact Center

7 million registrations in 2014

1 million credentials issued in 2014

Branch visit times less than 15 minutes!

Maintain Our Service

96%Customer Satisfaction Rating

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The Objective“I want to make the back office at the BMV run as well as the front office.” – Governor Mike Pence

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Good to Great

Building the Team• New Senior Leadership Team

– Commissioner– Chief of Staff– General Counsel– Chief Operating Officer– Chief Information Officer– Chief Financial Officer

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BMV Senior StaffPeter Lacy, Chief of Staff• Graduated from The Citadel with Bachelor’s Degree; Earned Master’s in

Business Administration from Xavier University.

• Possesses 17 years of experience with a leading independent automotive paint distributor featuring over 2,400 employees spread across 176 corporate stores.

• Spent the last 7 of those years as National Vice President of Operations, responsible for $70M budget supporting $500M in revenue.

• Has demonstrated a proven ability to lead employees through periods of significant organizational change due to new systems implementations and business model transformation.

BMV Senior StaffAdam Krupp, General Counsel• Graduated from Purdue in 3 years with a Bachelor’s Degree in Speech

Communications and Theatre Education and a minor in English.

• Graduated from IU McKinney School of Law, cum laude, and was a member of the Indiana Law Review.

• Has practiced law for 12 years, the majority of which have been as a litigator in two of the nation’s top-ranked law firms in NYC, representing clients such as the Ford Motor Company, Comcast, and Celanese Chemical Corporation.

• Experience in State government includes a judicial clerkship for Judge Mathias of the Indiana Court of Appeals, and Deputy Director, Contracts Manager, and Counsel for Indiana’s Division of Family Resources.

BMV Senior StaffKevin Garvey, Chief Operating Officer• Graduated with a Bachelor’s Degree from IU – Kelley School of Business.

• Joined the BMV in December 2008; served as the Director of Supply Chain Management, Executive Director of Fulfillment Operations, and Deputy Commissioner of Central Operations.

• Promoted to Chief Operating Officer in the fall of 2014.

• Responsible for ensuring day-to-day tasks are performed with an emphasis on efficiency, processing accuracy and cost savings.

• Implemented the BMV’s on-demand license plate production system — currently, Indiana is the only state utilizing this process.

BMV Senior StaffChristopher Riester, Chief Information Officer• Graduated from IU with a Bachelor’s Degree in Telecommunications.

• Was CEO of a technology consulting start-up with a focus on setting long-range, strategic growth initiatives, building a best-in-class team and delivering cutting edge technology solutions to premier clients.

• Led the customization of Managed Services Provider solutions for clients including: State of Indiana, Luxottica, Conseco, Polo, Hillrom, Papa John’s, Republic Waste and Ralph Lauren.

• Has acted in the roles of Project Manager, Business Analyst, Software Developer and Trainer for premier clients including: Eli Lilly, Praxair, Caterpillar and Wheaton Van while a consultant for Whittman-Hart.

BMV Senior StaffJeff Moon, Chief Financial Officer• Graduated with a Bachelor’s Degree from Ball State with a major in

Accounting.

• A Certified Public Accountant since 1989.

• Possesses eight years of CFO experience with two private sector companies. Was able to raise private equity, reduce expenses/improve operations and eventual sale of each company which resulted in saving over 300 Indiana jobs.

• Has spent nearly 20 years in Public Accounting starting as a staff accountant and worked his way up to Audit Partner at the large CPA firm, Clifton Gunderson. Relocated with this firm to Raleigh, NC in order to serve as Partner-in-Charge of newly opened office.

Steps Toward Transformation• Governor Pence directed outside assessment of BMV

– BMV adopts policy requiring all BMV employees to report suspected overcharges or undercharges

• BKD assessment “supplements the ongoing procedures being performed by associates at the BMV and their outside legal counsel”

• Report released May 2015– Released to public– posted on myBMV.com

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BKD Findings• Compliance

– Indiana Code complex, confusing, contradictory– Lack of independent and objective oversight

• Technology– Feasibility of systems– Documented practices– Access controls

• Operations– Organizational structure– Documented processes and procedures– Operational controls

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Confirmed the need for change!

Three-Legged Stool

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LE

G I

SL

AT

IV

E

OPERAT IONS

SYSTEMS

BMV

Agency Initiatives

Peter L. LacyChief of Staff

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Overall BMV Systems Improvement

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Agency Refocus

– Project Management Office (PMO)

– Internal Audit Department

– Overall Systems Improvement

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Project Management Office• Structured approach to reporting and

identifying issues• Sets goals to measure performance• Holds employees accountable

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Project Management Office• PrideLine

– Employees report areas of improvement

• Business Advancement Team (BAT)– Subject matter experts from different

departments identify issues, provide a Statement of Work and establish a plan to implement a fix

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Internal Audit Department

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Internal Audit Accountability

Director, Internal Audit

Commissioner

State Board of Accounts

Auditor of State General Assembly Governor

Create Audit Plan

Approve Activity

Evaluate Activity

Review Progress

External Stakeholders

Internal Controls

Review ProgressReview Progress

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System ImprovementBKD Assessment Findings

Information Tech-nology Depart-

ment

Operations

Legislative Code

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STARS Operating System

Current environment• System deployed 2008• Homegrown • System of patchwork

fixes• No complete system

refreshes

Future decisions• Feasibility study to

understand options• Refresh

– Stars 2.0– Update architecture– Develop enhancements

• Replace– Look at what other states

use– Is there existing system to

use

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Current StatusCertified Partners

Defined process for recording issues

Developed solutions

Processed refunds

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Each has been assigned to a senior staff member

Progress is being tracked by PMOState Fee

Phase I

Phase II

Phase III20

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Legislative Initiatives

Adam J. KruppGeneral Counsel

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• Total transactions over 18 months: 97• Average annual transactions (including new and renew): 1,389

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Of the “38 percent of the IDs” (451 total) used less than 100 times in an 18-month period, only 92 fees are in play.

• Taxes are included.

• Duplicate entries exist.• Master fee unique ID numbers (6 digits) attach to each fee;

in some cases, there are multiple master fee unique ID numbers for the same fee, described differently in the computer system.

• 6 fees the BMV no longer charges.

• Several fees have been combined.• Ex: Fee for new registration & renewal registration = 1 fee

now

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BMV Legislative Initiative Workgroup Meetings

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BMV Legislative Initiative Stakeholder Meetings

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Legislative Goals

1. Evaluate Structure2. Simplify the Code3. Promote Transparency4. Preserve Existing Revenue Streams5. Revenue Neutrality

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Registration and Fees• 191 ways to register a vehicle (including half-year fees)

• 26 vehicle-related weight classes

• Different vehicle types within the same weight classes pay different fees

• Farm vehicles pay approximately 52% of the basic registration fee for the appropriate weight class (original intent was 50%, but various legislative add-ons over time have bumped this number up)

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BMV Credentials (etc.)• Operator’s License• Commercial Driver’s License• Chauffeur’s License• Public Passenger Chauffeur’s License• Identification Card (3 types)• Endorsements

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Legislative Goals

1. Evaluate Structure2. Simplify the Code3. Promote Transparency4. Preserve Existing Revenue Streams5. Revenue Neutrality

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End Product?

• Easier Navigation• Predictability• Consistency• Less Confusion

Wrap-Up

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Transformational Change• Instituted structured approach for identifying and

reporting issues• Established process for continuous improvement• Set goals to measure performance• Laying foundation for transparent oversight• Evaluating and upgrading systems• Preparing proposal to streamline legislative code

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Vision• Make the Indiana BMV the most efficient

and trustworthy motor vehicle agency in the country.– Improved, well-documented processes and

procedures– Clear lines of accountability– Focus on compliance– Public transparency

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Questions?

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