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 S&P 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

4. 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

5. Cost as a function of Type of Equipment 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

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

9. 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