SUPPORTS ITEM NO. 4
CS&B COMMITTEE AGENDA
JUNE 13, 1996
ADMINISTRATIVE REPORT
Date: May 29, 1996
Dept. File No. PAK
TO: Standing Committee on City Services and Budgets
FROM: Licensing Redesign Team
SUBJECT: Licensing Review and Redesign
RECOMMENDATION
A. THAT Council approve funding for the implementation of the
Licensing Review and Redesign Better City Government project
at a capital cost of $500,000 and annual operating cost of
$99,000 with a loan from the Service Improvement Reserve,
repayable to the satisfaction of the Director of Finance.
Repayments will be generated from additional license revenue
and savings from the Operating Budget.
B. THAT Council approve the establishment of one full-time
quality/training coordinator position subject to job
evaluation by the General Manager of Human Resource
Services.
C. THAT the General Manager of Community Services report back
to Council regarding the outcome of implementation, and
specifically the staffing levels and other changes that may
be required, one year after implementation is completed
(1998).
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services is impressed with the
skill, commitment and enthusiasm with which the Licensing Team
has approached the review of its process, and believes that the
results will be a greatly improved level of customer service and
compliance. He RECOMMENDS approval of A, B and C.
COUNCIL POLICY
Council has approved a number of resolutions authorizing the Better
City Government program.
During the term of the 1994-1996 Budget Management Program, any
proposed increases in program and/or service levels are to be offset
by corresponding spending reductions elsewhere in the City's operating
budget or by increases in non-taxation revenues, subject to Council
discretion.
SUMMARY
Licensing Review and Redesign, a Better City Government project, is
now complete. This report highlights the results of the review and
identifies specific requirements for imple-mentation. The licensing
staff are very motivated and the Core Team has worked hard to design a
system which will improve our ability to provide much improved
customer service and also increase compliance. The proposed system
will reduce the current six-week to three-month backlog to, in most
cases, same day and a maximum seven to ten day turnaround. Staff will
be able to respond quickly to telephone inquiries and be proactive in
encouraging compliance and able to explore the possibility of
marketing information about business in Vancouver. A proposed
quality/training coordinator role will be responsible for training
staff on current and new procedures, establishing service standards
with staff and measuring customer satisfac-tion and staff performance
against the standards. Renovations are proposed to improve the
environment for the customer and staff. Total costs are offset by
ongoing savings and additional revenue which yield a four-year payback
on investment.
BACKGROUND
In May 1995, Council approved a work program for Better City
Government. The program consists of fifteen significant work process
review and redesign studies which, on completion of implementation,
are expected to bring significant improvements in service and
effectiveness. License and Regulate Business was identified as one of
the processes for the study. This process was subsequently divided
into two subprocesses; licensing and regulation of business and
property use. The review of licensing began in November, 1995, and
the review of regulation of business and property use is scheduled to
begin once licensing has been implemented. The licensing review is
now complete and recommendations for implementation are the subject of
this report.
DISCUSSION
Existing State
The best description of the licensing division was captured by a staff
member who said, "We're going under!" Staff in licens-ing were
thrilled that their area had been identified as one of the processes
for review and redesign. In early exploratory meetings we identified
a number of opportunities to improve licensing. Due to business
volumes and backlogs, we had no ability to follow up. Volumes have
increased significantly in all of the licensing areas, but there have
been no correspond-ing adjustments to staff since 1990 or systems
since 1972. As a result, it was taking longer to issue licenses,
which in turn reduced the ability to enforce regulations. At the same
time, staff were being asked to provide additional services for other
departments and agencies. (For example, trade certification is
verified with the province prior to issuing a business license.) By
the end of 1995, it was taking anywhere from 6 weeks to 3 months to
issue a business license. Renewals and payments come in at the rate
of about 1,000 a day, but get processed at about 200 a day. With the
existing staff level, the backlog peaks at about mid-March with some
40,000 renewals and payments not processed. Staff were spending as
much time on customer inquiries about the backlog as they were on
processing licenses. Service levels are detailed in Schedule A.
Review and Redesign Process
This review has been staff-driven from beginning to end. All
licensing staff participated in the selection of consultants, (Coopers
& Lybrand), Steering Committee and a Core Team of four staff to work
with the consultants. We defined the scope of our review and made a
conscious decision to first fix areas where we had significant control
and then look to areas where other divisions/departments were
involved. The Core Team consulted with the other staff throughout the
review to develop a new vision, to validate our findings and to test
out new ideas. We did a number of site visits to view alternative
systems and surveyed customers to ensure the design would address
customer needs and satisfaction issues. The Core Team has also
identified the importance of adequate training to ensure successful
implementation. We remain extremely excited about and committed to
this project.
Findings
The major areas of concern to customers centred around time and
run-around. Customers want to receive their license sooner and they
want to avoid going to a number of different counters to complete
their application. They also want additional payment options
(debit/credit card).
Staff identified problems with existing computer, filing and telephone
systems. The current licensing computer system is a mainframe-based
batch system which does not accommodate all licenses issued. It is
over twenty years old and has a number of limitations in today's
standard. For example, staff cannot issue a license on the spot
because the current system prints licenses bi-weekly. Staff maintain
paper files because of the inadequacies of the system. These files
are growing in number and are creating logistical problems for access,
as well as space problems for storage. The existing telephone system
cannot handle the incoming traffic. Many calls are lost because the
system does not have the capability to stack or distribute incoming
calls. Staff research indicates that 65% of the calls are of a
general nature. As an interim solution, voicemail applications have
been implemented, but staff recognize this as suboptimal.
The Core Team also identified that we may be missing a number of
potential licensees because we do not actively create aware-ness
regarding licensing requirements. The team is now develop-ing an
awareness program to increase compliance and correspond-ing revenue.
However, implementation is contingent on staff time availability.
A New Vision
The vision for licensing is a friendly environment, where a customer
sees value in obtaining a license, can sit and discuss his or her
needs with staff and in most cases leave with a license and additional
information in hand.
Staff want to establish new service goals for wait time and turn
around time. We intend to measure actual performance against the
goals through a regular dialogue with customers. We want to
consolidate tasks and work to becoming full customer-service
representatives.
In order to implement this vision the Core Team recommends that the
existing computer system be replaced with networked computers that are
capable of on-screen updates, local printing and electronic transfer
to financial systems. Staff have prepared a Request for Proposal and
will bring back to Council a recommendation on selection. The new
work space would accommodate a customer waiting area, customer
dialogue area and an out-of-sight back office. The telephone system
would have enhanced stacking and distribution capabilities.
This vision extends to include multiple channels for obtaining/
renewing licenses and broadens staff capabilities to encompass
clearances now done by zoning and building staff. For example,
renewals could take place on Internet or from off-site loca-tions.
There is also a view to develop and market information about various
business activities in Vancouver.
Building A New Process
Technology will clearly enable the new vision. Once fully
implemented, we estimate a gain of 3 hours a day for the 6 core
processing staff to work on improvements. Service levels will
immediately improve as staff begin to attack the backlog which we
estimate will take one month to clear. The new service level should
be easily maintainable, but will decline with the 50,000 renewals that
come due at year end. A flexible renewal date will smooth out volumes
and we have requested the required Charter amendment. We will report
back details regarding the amendment at a later date. This change
further reduces the need for temporary help. Once normalized, staff
will still have approximately 2 to 2-1/2 hours a day available for
improvements.
In redesign, we looked at a number of options including reducing the
staff level. Our conclusion was that a simple reduction in staff
would not adequately address service delivery or compliance.
We observed, with embarrassment, the bouncing that many applicants
have to go through. It is typical for a new applicant to begin at
licensing, then get sent to zoning, then building, back to licensing
and finally to the cashier. The redesign uses half of the time gained
to improve service further by eliminating parts of the shuffle. We
have initiated a 40 hour training program to develop skills required
for clearances and not have the customer run around to get them. This
approach will also help reduce the current backlogs in those areas
where clearances are currently given.
We plan to use the other half of the time gained on compliance. The
redesign proposes a systematic review of businesses and buildings.
The strategy includes a review of a number of current business
publications, such as Business in Vancouver, to identify new
businesses that may require licensing. It includes an awareness
campaign where licensing requirements are broadly communicated to both
targeted and general audiences. It also includes an increase in on
site inspections. Three property use inspectors will perform the
inspections (using lap top computers) with the time that they formerly
used to assist at the counter in licensing. Some initial
communication to accountants, lawyers and others has generated
increased volumes for staff and is likely to continue with a more
concentrated effort. It is difficult to quantify the impacts of an
increased focus on compliance, but we feel confident that the
financial estimate is achievable. We are collecting statistics on all
of our efforts to ensure that we concentrate on the appropriate areas.
STAFFING IMPLICATIONS
The Core Team anticipates that the implementation of a new licensing
system will have a tremendous impact on staff. Initially staff will
have to migrate from a mainframe to network environment and will
require training and support as they develop these skills. They will
also need similar support as they begin to take on the responsibility
of doing clearances. The Core Team recommends that a regular full-time
position be established to provide and coordinate training and to
establish and measure service standards.
Once implementation is complete and expiration dates are spread over
the calendar year, the support currently provided by temporary
employees will no longer be required. The efficiencies achieved in
implementation will be used to reduce backlogs and improve service
levels to customers both by tele-phone and in person. Customers will
have a shorter waiting period and will receive one-stop service. This
shift to one-stop service should alleviate stress in other divisions.
Staff will also fully develop an awareness program and work more
closely with the inspectors, who will now have some additional time to
follow up to increase compliance. The subsequent review of regulation
of business and property use will further address staffing levels.
Since the duties assigned to current positions will change, the Core
Team recommends a job evaluation review once implementa-tion is
complete to ensure the jobs and the compensation are aligned.
CUPE Local 15 have been provided with a copy of this report.
FINANCIAL IMPLICATIONS
The costs associated with implementing the Core Team recom-mendations
are $500,000 in capital expenditure and $99,000 in ongoing operating
expenditure. These costs are outlined below and additional detail is
provided in Schedule B.
Ongoing
Capital Cost Operating Costs
Project Management $80,000
Quality/Training Coordinator $38,000
Computer System
Hardware 153,000
Software & Training 137,000
Maintenance 36,000
System Support 25,000
Telephone System 10,000
Furniture and Equipment 100,000
Contingency 20,000
Total $500,000 $99,000
Ongoing savings of $54,000 have also been identified in the review and
are detailed below.
1997 1998 and on
Temporary Help $ 0 $42,000
Postage 10,000 10,000
Forms/Envelopes 2,000 2,000
Total savings $12,000 $54,000
These savings will be supplemented through additional revenues
obtained from the awareness program and follow up. A very
conservative estimate of $226,500 in additional fees is anti-cipated by the Core Team.
A cash flow analysis (Schedule C) indicates that implementation will
generate positive annual cash flow of $181,500 beginning in 2001 and a
payback period (including 7% interest) of 4 years.
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