EYE ON THE PIE: Let's close these BMV branches instead

September 26, 2005

Confused? Trying to figure out what time it is going to be where other Hoosiers live? Trying to know which license branches will be closed and which will be located in the nearest barbershop? Wondering whether you will get unemployment compensation before or after you find a job? Welcome to the New Indiana, setting its course for the 21st century.

These are three public relations missteps of the Daniels administration. Let's look at the license branch situation. Commissioner Joel Silverman announced May 3 that the Bureau of Motor Vehicles would close 12 branches by June 4. On Sept. 1, BMV was still diddling, announcing it would close six branches by Sept. 17, but some would not close, only move behind the cigar store Indian. On Sept. 12, BMV announced public hearings for closings in another eight communities. How many branches are going to close? Where?

Try the BMV Web site and look for a summary listing of closings, actual and proposed. Maybe you can find it. And while you are at it, look at the data for the individual branches. You may note also that BMV spells Vermillion "Vermillon," but let's not pick on folks when they are down.

I came up with my own list of a dozen branches to close. Since I do not know the BMV criteria, I made up my own:

First, branches with low volume should be shut down. I did that because I presumed the cost per transaction would go down as the number of transactions went up. Wrong. But I kept that criterion because it sounded good and it was in one of the commissioner's press releases.

Second, I used cost per transaction. Branches that have high costs should be closed and service shifted to branches with lower costs per transaction. I presumed that the added volume at the lower-cost branches would be lower than retaining that volume at the higher-cost branches. Got it? Go back and read it again. It makes sense, even if there is no proof for it.

Third, I chose to close branches where there were low percentages of necessary visits. BMV keeps data on the percentage of transactions actually requiring a visit to a branch. For example, you walk in and engage in a transaction you could have done over the phone or online, that gets counted as a transaction not requiring a visit to a branch. So branches with low percentages of necessary visits are those bombarded by folks who avoid all that good, labor-saving technology BMV has available. By closing those branches, maybe we can force our citizens to modernize.

Fourth, and finally, I decided every county must have at least one branch, and if only one branch, that branch would be at the county seat.

So here is my list for branch closings (and the counties in which they are located): No. 1 is Summitville (Madison) which has the smallest volume in the state (1,128 transactions), the highest cost per transaction ($19.50), and just 51.5 percent of its transactions requiring a visit (that's 148th out of 167 branches).

The rest of my list: Poseyville (Posey), Clay City (Clay), Bicknell (Knox), Montpelier (Blackford), Oden (Daviess), Dunkirk (Jay), North Judson (Starke), Union City (Randolph), Parker City (Randolph), Dale (Spencer), Elwood (Madison). Some of these are on one or another of the BMV lists that have been released. Some are exclusive to this listing.

If I could, I'd close 50 or 60 branches, after I told you my criteria and showed you the data. I'd try to get you involved before I started to announce closings. We don't need so many branches when the average person no longer needs to visit a branch except every few years. What we do need are administrators who think before they act.

Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.
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