Cost and Finance of Elections

1
Cost and Finance of Elections

• Voting Technology Conference
• Caltech
• Friday, March 30th, 2001

2
Danaher Corporation

• 3.8B Fortune 500 and SP 500 NYSE Company
• Compete in two major business segments
• Process and Environmental Controls
• Tools and Components
• 19,000 Associates in 25 Countries
• Driven by Danaher Business System
• Wall Street Journal Honor Roll for consistent
  stock performance
• 60 of Danaher companies are 1 in their
  respective served markets

3
Background

• Experience with State/Municipal WAN/LAN
  Implementations
• DE, Columbus, Philadelphia in 2001 - 2002
• NASED Certified - Software and Hardware
• Turn-Key Election Solution Provider
• Automation and Process Simplification
• Training Programs From DHR
• Network Administration
• Database Management
• Election Officials
• Poll Workers
• Public Education

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Annual Spending per Election

• Costs broken into two categories
• Fixed/Permanent Costs
• Infrastructure
• Election Officials
• Equipment, Telecommunications, etc.
• Variable Costs
• Function of number of Voters
• Function of type of election equipment

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Cost as a function of Type of Equipment
Initial Implementation Cost On-Going Costs
OCR Low High
FF - DRE Medium Low
TS - DRE High Low
Internet ? ?
Security concerns, infrastructure requirements
and type of internet voting (home vs. central
location makes it difficult to estimate voting
costs
6
Conversion Costs to New Technology
Converting To Per Registered Voter
OCR 6-8
FF DRE 15-18
TS DRE 18-25
Internet ?
7
Costs as a function of County Size and
Demographics

• Type of equipment does make a difference
• Speed of gathering and tabulating results impact
  costs ie network connectivity infrastructure
• Speed of results less of an issue for smaller
  communities
• Accuracy and reliability most important issue
  among jurisdictions
• Fixed infrastructure costs easier to justify in
  larger counties and municipalities
• Easier to spread cost over larger number of
  voters

8
Role of Federal Government

• Government subsidies to improve voting systems
  are appropriate
• New Administrative Branch may be needed to
  monitor eligibility, funding and financing
• Must allow local and state governments to dictate
  type of equipment process
• A centralized heavy-handed approach is not
  likely to work
• Local and State governments will move at their
  own pace
• Trying to force large numbers of conversions in a
  short period of time will likely result in chaos
  with mixed results
• Funding estimates have ranged from 1B to 2.5B
  over the next decade

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Election Equipment Industry

• Generally in good health
• Few large players and a number of smaller
  regional niche players
• Consolidation in industry is expected to continue
• Critical mass necessary to effectively service
  projected increase in demand
• Lumpy nature of demand makes industry generally
  less attractive
• Barriers to entry limit field
• Absorption rate of bubble difficult for one or
  two companies to dominate industry

10
Funding Strategies for the Long Run

• Federal Fund Matching
• Local and State Government bear some of the cost
• New Mexico, South Carolina, Delaware
• Interest free loans, General Fund allocations
• Complete Systems to be considered
• Registration, equipment, IT infrastructure, etc.
• A degree of autonomy for local and state
  governments must be preserved
• Imposing one national system not likely to succeed