Many cities and towns are involved in the process of re-engineering the way they serve their clients and their residents

Re-Engineering City Processes

Introduction

Many cities and towns are involved in the process of re-engineering the way they serve their clients and their residents. Their efforts are directed at:

Making sure that their staff are working smarter not necessarily harder;
Making sure that they are able to give their clients, service levels that are comparable to the ‘best of breed’ for cities or towns of comparable size or cities and towns that are in competition with them;
Making sure that they are making wise use of ratepayer taxes.

Essentially then, these re-engineering efforts have three stakeholder groups—a) city staff and city contractors who actually do the city’s work, b) clients such as homebuilders, home renovators, developers, persons who require services (everything from getting a dog license to collecting their garbage or paying their property tax bills) and c) ratepayers. The idea behind re-engineering city processes is not to make city staff or city contractors somehow work harder but to assist them in working smarter.

To that end, it is incumbent on City Managers and City Councillors to take the view that the fundamental way the City works needs to be looked at from time to time—no business or institution can remain unchanged over long periods of time. Every organization needs to overhaul the way it does things—it isn’t good enough to simply say: ‘Can we work more hours doing the same things over and over again?’ Instead, re-engineering means we have to ask three important questions for everything we do as an organization:

Are our existing systems or processes the best way to fulfill our goals and objectives?
Are our goals and objectives the right ones for us at this time?
Is there another way to fulfill our goals and objectives?

Re-engineering is one way for cities to escape the trap imposed on them by limits on how fast they can in crease their revenues and how well they can contain rising costs. The old responses—cutting services, reducing service levels, raising taxes, trying to get staff to work longer hours—are often self-defeating leading to city decay and negative growth.

Building Permits

The issuance of building permits is an important job for cities and towns. It leads to an increase in the town’s or city’s assessment base. It is important to understand that increases in property tax revenues for towns and cities derive from increases in both the tax rate and the assessment base. What this means is that even if a city can’t increase its tax rate (because of opposition from its residents and businesses or because the city would then become uncompetitive with neighboring towns or other cities with which it competes), its property tax revenues will grow if its assessment base grows because of new construction.

Consequently, timely issuance of building permits is a key mission objective for cities and towns.

Building permits are the economic backbone of any city or town. Being able to process these efficiently and effectively is important in terms of providing competitive service levels to clients (builders and renovators) while at the same time making sure that public and private safety are ensured.

But the building permit process is probably one of the areas that cities and towns could best look at to streamline and re-engineer.

Let’s ask the three questions for the City of Ottawa.

Are our existing systems or processes the best way to fulfill our goals and objectives? From a macro point of view, the City of Ottawa has seen its building permit applications grow from $1.2 billion per annum to $2 billion in the last decade but staffing levels remain essentially flat. That means that two things can happen—either staff have to work harder and longer to maintain the same service levels of a decade ago or wait times have to increase. Evidence suggests that wait times for building permits have greatly increased in the City of Ottawa—a simple permit for a medium sized home can now take 12 weeks to as much as 20+ weeks in some areas of the City. Staff are stressed and beleaguered by their clients; economic growth is curtailed; competitor cities and towns like Arnprior, Brockville and Carleton Place are reaping the benefits by having both lower costs and faster turn around times; the City’s property assessment base (and hence its property tax revenues) are not growing as fast as they should.
Are our goals and objectives the right ones for us at this time? Well, we still need to ensure public and private safety levels so the building permit review and issuance per se is not going to go away. So we need to see if we can re-engineer the process.
Is there another way to fulfill our goals and objectives? Maybe there is. Read on …

An Alternative

Rather than asking City staff to work longer hours or to somehow work faster, or simply throwing more money and resources at doing more of the same (i.e., hiring more staff or upgrading computer systems, say) maybe we should be looking at redesigning how we approach building permit issuance?

One of the ideas that comes to mind is to stream building permit applications. Does a building permit application for a residential addition really have to go through the same process as a major commercial project? Do we really need 45 copies of those plans and 45 separate approvals too? Probably not.

So this suggests that we might have three different queues for building permit applications:

a) one for large, complex projects;

b) one for small, straight forward projects and other projects;

c) one for highly rated builders.

The first service channel would use the existing permitting system—all the myriad government agency review and approvals would have to proceed.

The second service channel would have its own dedicated staff who would effectively be helpers for relatively unsophisticated applicants (largely homeowners)—they would be part of a more effective process of getting approvals by being involved earlier in the process, by becoming consultants, if you will, to clients.

The third service channel requires a bit more explanation. Does it make sense to require home builders who construct a lot of homes to apply for 300, 1000, 1,500, whatever number of building permits and go through the same process as the smaller home builder who completes 5 or 10 homes a year. Is the 300^th building permit for their tract houses really that much different than the 50^th?

Perhaps it would make sense to take these permits out of the system entirely? Why not allow home builders with a high rating to self certify? Their Architects and Engineers are covered by Errors and Omissions Insurance in any event. Let their Architects and Engineers certify and sign and issue their own building permits. Taking 1,000s of permits out of the system—now that is re-engineering in a big way.

Builders would be rated by the City and if they somehow abused this privilege, their rating would drop and they would have to go back in the queue along with the small builders and wait their turn—a heck of a punishment in terms of its economic impact on their organization. They would think twice before doing anything that would negatively affect their rating.

The City would still have inspectors do their job on all projects and the high rated home builders would still be required to pay for this and their building permits.

Ontario currently allows Registered Code Agents (RCA) to be employed by cities in the Province to review building permit applications. Engineers and architects should be encouraged to take the required courses and add the RCA designation to their credentials and become Certified Building Officials. This would be a great additional service (and fee) for their clients and speed up the building permit process—and nothing has a greater impact on the real estate industry than time.

Australia has gone further and privatized building permit issuance. Markham (Ontario) has started rating builders on the completeness of their building permit applications. How can cities expect that their clients to get better if there is no feedback from the city?

Think about the Internet auction site, EBay, for a minute. Someone in Ottawa can purchase classic Barbie Dolls for their child from a vendor in California, pay for it using their credit card or Pay Pal account, and have a very high degree of confidence that they will actually receive the purchased goods from someone they have never met and never will meet.

EBay achieves this level of trust in their community through their rating system—buyers rate sellers and vice versa. Cities need to embrace these kinds of feedback systems to improve through the use of calibrated measurements not only their performance but all those they deal with—municipal clients and suppliers alike.

It wasn’t that long ago that cities felt that they should provide all the services themselves; for example, they used to pick up garbage with city workers. What many cities have found is that they are going at setting public policy, good at regulating quality and service levels but bad at operating or maintaining or constructing things. What re-engineering suggests is that we all should focus on what we do best and the ‘doing of things’ may not be what a city is best at; so they should stop doing ‘it’.

Conclusion

This is just one example of re-engineering but imagine what the results could be:

faster service times for large, complex projects because 1,000s of conventional permits have effectively been removed from the system;
lower costs for high rated builders and much faster building permit issuance, the latter probably being more important to their economic well being than the former—time is everything in the construction business;
less confrontation between stakeholders, less stress on staff and higher levels of service for all including small builders and the home renovator, for example;
the City of Ottawa better able to compete with surrounding municipalities and international competitors too.