SUPPORTS ITEM NO. 1(a)
CS&B AGENDA
APRIL 10, 1997
ADMINISTRATIVE REPORT
Date: February 28, 1997
C.C. File No. 1006-1
TO: Standing Committee on City Services and Budgets
FROM: General Manager of Community Services
SUBJECT: Better City Government Development and Building Review
--Time lines, Improvements, Efficiencies and Cost
Savings
INFORMATION
The General Manager of Community Services submits this report for
Council s INFORMATION.
COUNCIL POLICY
Council has committed to improving the quality of City services
through the Better City Government program.
PURPOSE
This report responds to Council s resolution of January 28, 1997:
THAT staff provide a report within thirty days establishing
time lines for achieving Better City Government
Development and Building Review improvements and
efficiencies, and identifying the cost savings achieved.
A companion report, Development and Building Regulation Review:
Rezoning, Permitting, and Inspections Re-design, details a major
initiative which will achieve long-term improvements in the
processes which the City uses to regulate development and
building. This report provides context for that initiative and
identifies other actions, consistent with that initiative, which
will achieve shorter-term improvements during 1997.
SUMMARY
The initiation of the Better City Government program and the
formation of the Community Services Group has resulted in a
number of actions to improve services and reduce costs. Among
the most substantive of these are our efforts to improve the
processes through which the City regulates building and
development. In a companion report, we propose to begin
implementing re-designed rezoning, permitting, subdivision and
inspection processes. Implementation will occur first through a
prototype but will build to completely revamped procedures,
handling all applications, before the year 2000.
The new processes require a sizable investment in technology,
staff training, and perhaps new facilities. In order to achieve
a satisfactory level of service, the new processes will also be
fairly staff intensive. Therefore, major cost savings to the
City and reduced fees for our applicants are not anticipated in
the short term. However, by greatly reducing cycle time and by
introducing greater predictability and certainty, the new
processes will result in substantial savings in holding and soft
costs for our applicants. These savings should pay for the costs
of improved service.
In parallel with the commencement of the prototype, we propose to
introduce immediate improvements to our existing processes this
year. These will bring time-saving benefits to our applicants
now and should, as well, free up more staff time to pursue even
larger improvements for the future. Combined with reviews of
some of our most troublesome regulations, these improvements
should signal a large step in the progress of the Better City
Government program.
BACKGROUND
Council approved the Better City Government program in late 1994,
simultaneously with the interim reorganization of City
departments, including the formation of the Community Services
Group.
Community Services has fully embraced the Better City Government
principles, including fundamental reinvention of the way we do
things, moving authority to more appropriate levels in the
organization, and extensive staff and customer involvement in all
our changes. We have consistently emphasized, as our primary
objective, improved service as perceived by those whom we serve.
Significant milestones to date in Community Services are listed
in Appendix A. Standing out among these are events relating to
the progress of three high-priority Better City Government
reviews: Regulation of Development and Building, Licensing and
Regulation of Business, and Public Involvement. The last two
years have also been marked by a number of major technological
initiatives: a new Permits system (PRISM), a document management
and imaging system (DOMINO), a business license system (LICENSE
+), and a front-line information referral system (QUICKFIND).
In addition to facilitating the events listed in Appendix A, over
the past two years we have pursued amalgamation of administrative
support services across the four remaining Community Services
departments. We now provide consolidated human resource and
information system support for the four departments. Shortly we
will merge financial management and reception functions and
provide a central graphics/communications service. We have also
placed emphasis on improved technical training for customer
service staff and on a more empowering work environment.
Internal improvements have been complemented by a number of
small-scale changes aimed at making life a little easier for
those doing business with us. For example, we have improved
signage throughout the East Wing so that people can more easily
find the services they need; we have brought in new payment
processing equipment so that applicants can pay for their permits
with a credit or debit card; and we have made information and
application forms available through faxback and via the internet.
A change in open hours has improved response time on telephone
inquiries and turnaround time on small applications.
Finally, the organization has been substantially flattened. Four
department heads (in Housing, Planning, Social Planning and
Permits and Licenses) have not been replaced, and we are
researching new organizational models which assume these
positions will not be filled in the long-term. This layer of the
organization has been effectively removed, and we will be
proposing to reallocate the resources which remain from two of
the four unfilled positions to improve our organizational
effectiveness. The salaries of the other two positions have
already been reallocated at the corporate level to fund the
general Better City Government program throughout the City
organization.
DISCUSSION
Council s instruction that we report back on the time lines for
achieving improvements, efficiencies and cost-savings in the
development and building regulation process followed a discussion
of new fees for development, building and trade permits. Several
representatives of the development and building industry spoke to
Committee and were not happy with the fee increases. One also
expressed impatience with the City s rate of progress in
achieving process improvements which would increase service and
lower costs.
Community Services staff share the industry s concern with the
cost of development and building approval in the City of
Vancouver, but must also observe:
The total cost of the City s fees are not out of line with
those levied by other municipalities in Greater Vancouver
and are substantially less than those in other major cities
across Canada. Until the recent increases, Vancouver s fees
were considerably lower than others in the GVRD.
Most of the recent increase in fees results from a policy
decision to include all City overhead in the fee
calculation. Most of this overhead, charged at a flat
amount, is incurred outside the permitting process itself
and outside the Community Services Group. It covers such
things as building maintenance, central computer services,
accounting, budgeting, and purchasing which do not vary with
the level of permitting services.
Even many of the direct costs of permitting occur outside
the Community Services Group in, for example, Engineering,
Fire, Parks and Health. Over fifty percent of the direct
cost of development permits results from staff costs outside
the principal permitting department, Planning.
Increases in development, building, and trade fees were
critical to achieving Council s 1997 budget objectives.
Over half of the City s new user-fee revenues ($4 million
out of $7.2 million total) came from this source.
Community Services staff also share the industry s impatience
with the pace at which we are able to achieve improvements in our
permitting process. However, the rapidity with which we can
achieve change is affected by several factors:
The process is enormous and enormously complex. Well over
three-hundred staff in at least ten City departments are
involved on a regular basis, and the applicable by-laws,
regulations, guidelines, administrative interpretations, and
other documentation fills at least ten feet of shelf space.
Our initial scoping exercise concluded that no individual
knew the entire process from beginning to end.
Almost every regulation and every procedure was put in for a
good reason and has a constituency waiting to defend its
continued inclusion.
Even over the time we have been reviewing the process, it
has grown more complex. Since 1995, Council has enacted new
by-laws or procedures regulating external design in
single-family neighbourhoods, the removal of trees from
private property, the construction of building envelopes,
and the review of structural engineering, to name a few.
New regulations to shape the City s skyline, control traffic
demand, meter the pace of development, or save more aspects
of the City s heritage enjoy current constituencies and
therefore loom on the horizon.
There are strong indications from the public that they do
not wish to sacrifice development quality or safety for
administrative efficiency.
The City s forces are more than matched by the forces of
industry and community, alternatively finding loopholes in
the most cleverly crafted by-laws or demanding that there be
a new law or an even more vigilant process to curb some
newly perceived problem.
Our re-design efforts have been true to the Better City
Government principle of inclusion. We have involved staff,
industry and community in evaluating our present processes
and designing alternatives. Involvement takes time, and
ironically those impatient with the pace of change also
demand more time so that they can participate in the design
of that change.
While we have enjoyed some consultant assistance, most of
the review work has been conducted by existing staff who are
familiar with our present processes and their rationale.
The resources we could put to the review task have been
limited by the need to continue to provide regular services.
Only nominal backfilling has been possible within a
constrained budget. Both the pace of our review and the
quality of our regular service have endured necessary
compromises. Our review has proceeded slowly and our
regular services have, if anything, deteriorated as the
result of diverted resources.
Within this context, staff teams have been working with
enthusiasm and making measured progress on a seven-phase program
to completely renovate or radically improve the City s entire
system of regulating development and building. Phase one, a
review of the rezoning, permitting and subdivision processes, has
just been completed. Phase two, a review of our inspection
processes, has been completed simultaneously with phase one.
Both reviews are summarized in the companion report, which
recommends implementation via a learning model. Beginning with a
prototype, we propose to scale up to a completely new process,
handling one-hundred percent of applications by the end of 1999.
While we prototype the new process, we will also begin a review
of our post-development and business-license enforcement
activities. Reviews of the processes through which we develop
regulations and a comprehensive review of the regulations
themselves will follow in 1998 and subsequent years, facilitated
by our public involvement work.
Thus far, our review has concluded that we do many things well.
Many regulatory activities occur quickly and with high quality.
However, some of our processes are not only inefficient, they are
also inadequate. We are not providing an acceptable level of
service to our customers. Cycle times (the elapsed times in our
processes) are generally too long. Information is sometimes
insufficient, contradictory, and confusing. Many of our
requirements do not emerge in a predictable, systematic and
rational manner.
Starting to fix these problems may require more resources, not
less. While we think there are ultimately lots of savings
possible through efficiencies, many of those savings will be
consumed (at least initially) in providing an adequate, and by
definition improved, level of service. Neither staff nor our
customers want a less expensive service which is no more
satisfactory than what we do today. Our current overall level of
service is not acceptable; it must be improved, and improvement
will not be costless.
In the short term, we are unlikely to achieve significant
cost-savings which can be reflected in lower permit fees.
Achieving both efficiencies and better service will require
investment in new technology, new processes, new and ongoing
staff training, and perhaps even new facilities. Through the
transition, staff will have to manage old processes at the same
time as they are designing and implementing new ones. This will
continue to put a strain on our staff resource and will likely
not permit a reduction in either staffing or costs.
In the longer term, efficiencies may permit reductions in the
direct costs incurred by the City and passed on to our applicants
through fees, but the magnitude of these is difficult to estimate
until we have actual experience with the new processes. Savings
will also depend on changes in regulations, which cannot be
prejudged at this time.
As there will be a need to continue most staff resources and
invest in new technology and other improvements, significant
savings to our customers will not initially come through fee
reductions. In fact, fees will have to increase over at least
the next several years to finance investments in better service.
However, the cost of time is real, and many of our customers have
told us that they would be willing to pay more for faster
processing and better service. It is not uncommon for many
applicants to be financing several million dollars while waiting
for permit approval. Even at current low rates, financing a
million-dollar loan costs over $150 a day in interest. Every day
we knock off permit cycle time can save our applicants large
amounts in holding costs. Similarly, an improved process, with
greater certainty and consistency, can yield large savings in
soft costs. A single design professional can bill in excess of
$1000 a day. If that professional is sent back to the drawing
board several times because of a poorly functioning approval
process, the costs to his or her client can be staggering. If
the value is there in a faster, smoother process, application
fees are not an issue.
Fee increases will cover the costs of long-term improvements as
detailed in the accompanying report. Those improvements will pay
for themselves with reduced cycle times for our fee-paying
applicants. Our process re-design teams are forecasting a
twenty-five percent decrease in cycle time for complex
applications and a ten percent decrease in the time it takes to
process a simple application. For processes that now take
anywhere from eight weeks to a year, the applicant s savings in
holding and soft costs can be substantial. As well, we do not have to wait for the entire new process in
order to start some time-saving changes now. There are a number
of improvements which we can make to the existing process this
year before the prototype unfolds and is tested. These are
consistent with the model proposed for the prototype but focus
immediately on specific hot spots where quick actions are needed
and possible. Among the changes we propose to make this year are
the following:
Rezoning Staff Committee
We propose to continue a new procedure which we began late
last year in response to time-consuming and confusing
discontinuities in our rezoning process. Previous to
putting this committee in place, the City s draft
requirements in association with a rezoning application
arose incrementally as an application was circulated among
departments. It was not uncommon for these requirements to
be contradictory and, in aggregate, more than a project
could bear, albeit all supported by Council policy.
Difficult negotiations and re-negotiations would often
ensue, both between the applicant and departments and among
departments. On occasion, applicants would shop for advice
and requirements among various city interests, further
prolonging and confusing the process.
Now we convene representatives of all involved City
interests at the initiation of a rezoning to thoroughly
review the proposal and identify as many concerns and
requirements as possible early in the process. This will
set both the applicant and City staff on the path to issue
resolution earlier than was previously the case. It has the
potential to save several months in processing of relatively
complex rezonings, and will certainly reduce the instances
where applications find themselves at a dead end after
several months because there was insufficient guidance at
the beginning. A similar committee has guided planning for
major projects since the late eighties with remarkable
success at resolving issues in a timely manner. We look
forward to similar success with this initiative.
Accelerated Prior-to Clearance for Major Development
Permits
In our current process, it is common for permits to be
approved subject to satisfying several prior-to
conditions. When these conditions are met, the permit is
issued. The applicant usually submits revised drawings and
other documentation to demonstrate compliance with the
conditions, and these are circulated to applicable
departments for review. This circulation can take as long
as four to six weeks and often results in further delays, as
the resolution of some conditions may raise other conflicts
and issues.
Instead of circulating prior-to responses for major
applications, this spring we intend to initiate a meeting of
reviewing departments at which the applicant will walk us
through the response to all conditions and we will attempt
to identify and resolve any issues on the spot. If it
works, this could radically compress the amount of time it
takes to get from a conditional development permit approval
to the actual development permit issuance and hence to the
building permit.
Building Code Review Branch Process Improvements
Building permit applications for commercial and multi-family
projects receive technical review in the Building Code
Review Branch of Permits and Licenses. This is one of the
most significant bottlenecks in the entire permitting
process. Growing demands to evaluate building code
equivalencies (i.e., variances from the letter of law),
increasingly complex and lengthy projects, and a priority
system which allows some projects to jump the queue ahead of
others have resulted in a backlog of work averaging between
eight and fourteen weeks. This means that some plans will
sit in an in-tray for as long as three to four months before
a plan review engineer or technician will begin processing
them. This is clearly unacceptable.
We have established the Building Code Review Branch as a
1997 priority and have commissioned a special process review
to reduce the backlog here and generally speed up the
process. This review will report out in the first quarter
of the year and is expected to recommend a redistribution of
work and a revised system of queue management. We hope that
new procedures and work flows will dramatically reduce the
backlog to the point that applicants can begin receiving
feedback on the adequacy of their designs within a few days
of submission.
We also intend to accelerate some aspects of our planned review
of the regulations themselves, not just the processes through
which we administer the regulations. During 1997, we will single
out and provide Council with alternatives to a few isolated
regulations which have been particularly problematic to
applicants or which have been ineffective in achieving public
intent. We will confirm the regulations to be reviewed with our
community and industry partners, but a few examples stand out
now:
Among the prime candidates for review are those regulations
which govern change of use in existing buildings, when no
actual new development takes place. A small business moving
into previously occupied quarters will too frequently find
that the change in use triggers new requirements (More
parking spaces is a prime example.) which are difficult, if
not impossible, to meet. This will delay or frustrate the
move or result in a patchwork of relaxations from the City
to make the new and unique situation work. Over time,
simpler, less use-sensitive and less discrete regulations
may be a better solution. We made improvements to the
Building By-law last year to deal with some of the problems.
Other issues are contained in the Zoning and Parking
By-laws.
Another area we intend to pursue is the set of regulations
governing awnings and awning signs. These are becoming
increasingly popular in Vancouver and serve the dual
purposes of advertising and pedestrian weather protection.
However, acquiring City permits can be more expensive and
more time-consuming than actually constructing the awnings
themselves. As a result, many erect awnings without
permits, creating enforcement problems for the City and
inequities for those firms which try to observe the law. A
simpler, more straightforward set of regulations and
permissions would likely be both less onerous and more
effective.
In 1997 we will complete an update of the Vancouver Building
By-law to include recent revisions from the National
Building Code. This will simplify and clarify several
sections, reduce the length of many regulations, consolidate
rules governing single-family construction and will mitigate
the need for some equivalency interpretations.
Last year, we initiated a discussion with the Province and
the industry on a simpler, more easily interpreted
International Plumbing Code. Cutbacks at the Ministry of
Municipal Affairs have stymied progress on provincial
adoption of clearer, more rational plumbing regulations.
However, we will explore the possibility of offering the
International Code in Vancouver as a parallel alternative to
the present plumbing by-law.
Finally, the increasing complexity of our regulations for
single-family dwellings has triggered a fundamental
re-think. Starting from the premise that the present and
growing system of single-family regulations is not
sustainable, we have engaged members of the design
professions, the development industry and community
representatives in a discussion of alternatives which could
meet community needs with less bureaucratic intervention.
To this point, our thoughts on this have been general and
speculative, but we have done enough work to believe that
the trend to more and more prescriptive rules is not
desirable and that an exploration of alternatives is
worthwhile. We hope to report to Council on this within the
next few months.
CONCLUSION
The processes through which the City regulates development and
building are incredibly far-ranging and complex, they are
time-consuming and expensive, and multiple constituencies and
objectives make them highly resistant to change. Further, they
refuse to stand still while we re-design them. They demand
constant and growing attention, even as we work to reduce their
overall resource consumption. Freeing up the time and the
presence of mind to radically improve these processes has
proven to be challenging, to say the least. Nevertheless, we
continue to make progress as detailed in this and the companion
report.
We are committed to stay the course and committed to the
collective vision we have built to guide the change process
(Appendix B). In pursuing this vision, we hope to be assisted by
our many partners in this exercise. That assistance can take
many forms, including:
Commitment from Council to reduce regulatory complexity and
the demands for new regulation;
Openness from Council and the community to consider
alternatives to traditional regulation;
Involvement of other departments in accelerated processes,
including the delegation of decision-making authorities to
appropriate staff representatives;
Patience and understanding that making service improvements
of the immense scale contemplated here will at times result
in momentary deterioration in the level of service as
resources are strained to their limits;
Willingness of the entire City organization to buy-in to our
sense of urgency and to accept the risks which come with
dramatic change;
Continued active participation from the community and from
industry in the identification of issues and in the design
of solutions;
Investments in the technology, physical capital, and human
capital required to facilitate improvement.
As we pursue fundamental improvements in how the City regulates
building and development, we are constantly reminded that over
the past couple of decades the City has undertaken several other
reviews of these processes and that little substantive change has
resulted. However, these other reviews have all been partial and
half-hearted. They were abandoned when they failed to find the
quick and easy fix. There is no quick and easy fix. Fundamental
change will only occur through long and hard work, significant
costs, and difficult decisions. However, we sincerely believe
that, without fundamental change, our regulatory processes are
ultimately unsustainable. They will collapse under their own
weight as they grow not only inefficient, but also increasingly
ineffective. If we care about the City, we have no real choice
but to proceed to a radically different regulatory system. We
are firmly committed to that journey.
* * * * *
COMMUNITY SERVICES MILESTONES, DECEMBER 1994-FEBRUARY 1997
December, Council approves the start of the Better City
1994 Government Program, including aligning Health,
Housing, Permits and Licenses, Planning and Social
Planning into what was later to be labeled the
Community Services Group.
January, The General Manager of Community Services delegates
1995 review of Council reports to twenty-five line
managers, clarifying accountability and removing a
significant bottleneck in report processing.
Managers have further delegated to their staffs.
May, 1995 Council approves fifteen key areas for Better City
Government review. Three of these involve
processes led by Community Services. These are the
first priority area, regulation of development and
building; the second priority area, community
involvement; and the seventh priority area,
licensing and regulation of business.
June, 1995 PRISM, the new computer system for issuing and
tracking permits comes on line. Work on PRISM
began in 1989.
July, 1995 After extensive discussion with staff in all
departments, Vision and Principles are published to
guide the Community Services Group change process
(Appendix B).
November, Review of the regulation of development and
1995 building gets underway with a scoping study of the
entire process.
Review of the business license process commences.
January, After extensive negotiation, the Vancouver Health
1996 Department is transferred to the Vancouver Health
Board, reducing the size of the Community Services
Group by half and saving the City over $6 million a
year in expenditures.
February, Council receives a report outlining the public
1996 involvement review process.
Council approves the transfer of Cordova House and
Taylor Manor to voluntary societies, further
reducing the Community Services establishment and
decreasing the number of City bargaining units.
March, 1996 Council approves the acquisition of a new document
management/imaging system (DOMINO) to assist in
managing permit processing workflow and maintaining
permit records.
May, 1996 The development and building scoping study
recommends seven sub-processes for re-design and a
phased program to complete this work.
June, 1996 Council receives the report of the business license
process review and approves a new licensing system.
The new license system is scheduled to become
operational in renovated license offices in May of
1997.
Re-design of rezoning and permits processes begins.
September, Document management/imaging system (DOMINO) comes
1996 on line ahead of schedule.
Rezoning and permits re-design holds a highly
successful visioning conference with industry and
community representatives at the Plaza of Nations.
October, Re-design of inspection process begins.
1996
Council approves implementation of QUICKFIND, an
electronic information system for front-line
service. Initiated in Community Services, but
designed for the entire City organization,
QUICKFIND will be operational on reception desks by
June, 1997. Council approves the second phase (backfile
conversion) of the document management/imaging
system (DOMINO) project. All paper address files
will be converted to electronic form during 1997.
February, Basic process re-designs of rezoning, permitting,
1997 subdivision, and inspections are completed, and
staff recommend an implementation program.
PRINCIPLES FOR THE CHANGE PROCESS
1. VISION
We will drive change with a clear, shared vision of what we want
to become.
2. COMMUNICATION
We will promote open, honest, two-way communication throughout
the process, with no hidden agendas.
3. SECURITY
We will respect people and their concerns. We will work to
provide secure futures and assist to reduce stress.
4. INVOLVEMENT
We will encourage full participation. We will involve those
affected by change in designing it and making it happen.
5. TIME
We will make time to change. We will free up people to
participate in the change process.
6. ACTION
We will implement as we go, and we will make big changes.
VISION FOR THE RESULTS OF CHANGE
1. SERVICE
Customers will only meet knowledgeable and helpful staff.
It will be easy for all customers to know about our services
and to access the service they want when they want it.
Accurate information will be readily available.
People will want to comply with regulations and get permits.
They will find the process helpful, and it will add value to
their projects.
All customers will receive prompt service, delivered in a
consistent and fair manner.
2. CLARITY
Regulations will be as clear and as simple as possible.
Rules and processes will be easily understood.
The reasons and purposes for what we do will be readily
apparent.
3. CONFIDENCE
All employees will feel valued and empowered.
Staff will make the decisions they are trained and paid to
make. Second thoughts and second guesses will be rare.
4. SUPPORT Staff will have the tools and work environment
they need to serve their customers expectations.
Staff will be fully trained.
Staff will be able to balance work and personal needs.
Work will be challenging and fun.
5. EFFECTIVENESS
Our processes will merit respect.
Administration will be timely.
Follow-through will be efficient and equitable.
Objectives will be clear and consistently achieved.
Results will be excellent.
6. TEAMWORK
Staff and departments will work as teams, cooperating toward
shared objectives.
There will be clear priorities and roles.
Communities will be our partners. The public will be informed
about issues, will be involved in reaching decisions and will
participate in achieving solutions.