The competition for state license office bids has ramped up in the Ozarks.
The bidding period recently closed for three local offices – at 1002 S. Glenstone Ave., the Ozark office at 103 W. Church St. and the Nixa office at 214 Village Center St. The Breast Cancer Foundation of the Ozarks currently manages all three, and they’re not alone in the race to win the contracts come 2020.
Among the competitors is CGB Holdings LLC, and according to Missouri secretary of state filings, former BCFO Executive Director Crystal Webster is an organizer for the group. Webster led the nonprofit for 11 years and has experience running the license offices for the nonprofit.
Other applicants are Gerard Armon Group LLC and DMV Operations LLC, according to state documents. Webster did not return requests for an interview, and officials with the other applicants could not be reached by press time.
The 180 license offices statewide are under the authority of the Missouri Department of Revenue and the Office of Administration division of purchasing. Chris Moreland, spokesman for the state OA, said there’s no set deadline for the state to issue the contracts, and it’s unclear when they will be awarded.
This is just the first wave of license office bids. The BCFO manages offices in Joplin and Republic, which open for bid this month, said Joe Daues, the nonprofit’s CEO who succeeded Webster this summer.
Over 40 employees work at the BCFO’s license offices, which is managed under BCFO Titleworks Inc. The open bidding process began in 2009 under Gov. Jay Nixon, changing the longtime tradition of awarding the office contracts to the governor’s political supporters and family members, according to Springfield Business Journal archives.
There is also an office in Battlefield Plaza at 319 E. Battlefield Road, which is currently managed by for-profit Elle Management LLC, that will be up for bid before year’s end. According to its website, O’Fallon-based Elle Management operates nine license offices in the state, including locations around Kansas City and St. Louis.
The operators say the bidding process is highly competitive, with many pointing to recent license fee increases that pull in more revenue for the offices. Statewide, the license offices collected $33.5 million in processing fees during fiscal 2019, according to state data.
License office fees had remained level for years, but the legislature approved fee increases this year. Those involved say the move has increased interest in the contracts.
“The competition is greater this year because of the legislature’s approval and the governor’s signature for the agents fee to slightly increase from last year,” Daues said.
Processing for a three-year driver’s licenses rose to $6 from $2.50, and driver’s licenses that last longer than three years jumped to $12 from $5, according to a news release from the Department of Revenue. The annual vehicle registration fee also increased to $6 from $3.50, according to the release. The increases were the first in 20 years.
For Elle Management, the higher fees have translated into employee wage increases, said owner Terri Harris. She said she’s now able to pay hourly license clerks $16, up from $12.
“We were really struggling to be competitive and to attract good employees at the wages we were paying. It has really helped us attract a more qualified level of candidate,” Harris said. “The overhead of running a business continues to increase.”
Harris declined to disclose operating costs but said the offices can generate $75,000 to more than $100,000 in annual revenue.
For nonprofits, such as BCFO, the license office contracts represent another income stream – outside of unpredictable donations. State data show the five BCFO-managed offices recorded over $1.7 million combined in fiscal ’19. The top-grossing offices were on Glenstone Avenue, with nearly $569,000 in processing fees, and in Joplin, which came in at $479,000.
Net proceeds after operating costs go to the nonprofit’s bottom line. Past SBJ reporting recorded the license offices as 30%-40% of the nonprofit’s total annual revenue. In its most recent IRS 990 tax form on file, BCFO reported in 2016 total revenue of $3.75 million, up from $3.29 million in 2015.
“We use the money that we make from these license offices to offset the administrative costs to run BCFO,” Daues said. “We want to use as much funding as possible for the purpose that it was donated.”
Daues said BCFO pays the rent, utilities, car payments and clothing for kids of patients undergoing breast cancer treatments – roughly 350 families a year. He said the fee increases will allow BCFO to update some license office equipment, and offer a health benefits package and raises to its license office employees.
Moreland said the contracted licenses offices are competitively bid and awarded based on scores evaluated during a request-for-proposal period.
“There is no set deadline for completing the bid evaluations and award since the number of responses vary by location,” Moreland said via email.
As a result, Daues said BCFO’s contracts have been extended through early March.
Moreland said 28 bids statewide – including the Glenstone, Ozark and Nixa offices – were under evaluation as of Dec. 4.
Over 40 employees work at the BCFO’s license offices. Daues said if BCFO lost a contract, there would be a transition period for the new owner to take control of the offices.
His game plan is to continue reapplying for the BCFO’s current offices, and he’s not interested in bidding for other offices in town, like the Battlefield Plaza location.
Daues declined to comment on Webster’s bid for the offices, but noted he was aware of the competition.
“We have such a solid base of people that help every year, that the BCFO will be fine either way,” Daues said. “What these offices allow us to do is to operate a lot more efficiently and to stretch the donor’s dollar so much further, which helps more people in the Ozarks.”
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