Missouri Department of Revenue awards final license-office contracts in St. Louis area
This article first appeared in the St. Louis Beacon, Nov. 1, 2009 - Almost 10 months after Gov. Jay Nixon took office, his administration is almost finished awarding the 183 contracts for the state's quasi-private "fee offices" that handle drivers licenses, license plates and vehicle titles.
The last in the St. Louis area -- Affton, south St. Louis and Sullivan -- were announced late last week by the state Department of Revenue, which oversees the general operation of the offices. The people who get the contracts to run the offices usually change hands with every new governor.
The offices are called "fee offices" because a fee is tacked onto each transaction to pay for the operations, employees and profit at each office.
Of the 183 offices, bidding has closed on 181 and 127 contracts have been awarded. Bids are still being accepted on contracts to run two offices.
Traditionally, those obtaining the contracts were allies of whoever was governor, a process that often touched off partisan bickering -- especially when the new governor was from the opposing party of the previous governor.
Former Gov. Matt Blunt, a Republican, ran into a lot of controversy over some changes he made in 2005 that critics claimed inserted more politics into the process. He was particularly criticized over his decision to privatize 11 offices -- then generally the largest in the state -- that had been run directly by the Department of Revenue.
Blunt also allowed a second tier of allies to set up management companies that ran the fee offices through private contracts with the people initially awarded the public contracts.
About midway through his term, Blunt opted to dramatically change the award process by putting up for bid any new office contracts that arose when the initial fee-office contract holder opted to quit.
Nixon, a Democrat, supported the bid idea, and persuaded the GOP-controlled state Legislature to approve a bill last session that -- now signed into law -- mandates that all the fee offices go up for bid.
Nixon's bid awards have not escaped controversy. The Missouri Republican Party has accused him of playing politics with some contracts that have gone to prominent Democrats, notably last summer's awards that went to the ex-husband of state Auditor Susan Montee.
The state GOP brought up the Montee flap once again last week, in response to an Associated Press story resurrecting the matter.
A number of office contracts have gone to civic or non-profit groups, such as Rotary or Lions clubs.
However, Nixon and his allies note that some prominent Republicans also have bid successfully for such contracts, among them a number who initially obtained the fee offices under Blunt. The Revenue Department says that 72 of the 127 contracts awarded so far -- a majority -- have gone to groups, people or relatives who already were running the offices under Blunt.
Nixon maintains that his system is fair. “In the past, license offices were given out at the governor’s discretion, in many cases to his political allies,” Nixon said in a statement.
“Now, an open and transparent competitive process is used, and professional evaluation teams award the bids based on financial efficiencies and customer service. This new system promotes innovation, and opens up the potential management of these offices to anyone who is willing to submit a quality bid.”
The bid awards under Nixon often have gone to people who also have agreed to turn over a portion of their profit back to the state.
Under the latest awards, the Affton license office, which will remain at 9503 Gravois Road, has gotten a new operator: The Lavin Co., LLC.
According to the Revenue Department's release, "The company is associated with Patrick J. Murphy and his son, James W. Murphy, both of St. Louis County. The elder Murphy is a businessman who previously assisted his wife in the operation of the Bridgeton License Office. The winning bid was one of four submitted. An 8 percent ($22,478) return to the state was included in the bid."
But the contract for the license office at 4628 South Kingshighway will remain with Damir Huskic, who initially obtained the fee office contract in 2005 under Blunt. The South Kingshighway office previously had been one of the state-run operations.
According to the Revenue Department, Huskic's bid included a promise to return 5.2 percent ($20,380) back to the state.
In Sullivan, in Franklin County, Jackie and Steve Vaughn of Viburnum have been selected to be the new agents. They plan to move the license office to a new location at 111 Progress Dr. The Revenue Department noted that "Jackie Vaughn has previous experience from working at the Viburnum, Potosi and Sullivan license offices."
Their bid was the only one submitted for the Sullivan office, and offered no percentage return to the state.
Revenue Department spokesman Ted Farnen said that the two office contracts still up for bid are in Alton and Keytesville. Both contracts are being rebid because, in the case of Alton, there were no bids, and at Keytesville, the only bidder withdrew.