Friday, October 28, 2011

Can local governments enforce the energy code and save money?

This idea may sound absurd, but it does hold promise in the not-so-new practice of streamlining.

Streamlining is the practice of improving building regulatory processes to remove overlap and duplication and create more efficient administrative procedures. When implemented properly it not only makes building departments more efficient and effective at enforcing building code requirements, but it also improves customer service and provides financial savings for the local government, its citizens and private industry. Thanks to the Alliance for Building Regulatory Reform in the Digital Age (the Alliance), a tremendous amount of research and outreach has been done around streamlining over the past decade. An upcoming report by the Institute for Market Transformation (IMT) will examine how streamlining can improve compliance with building energy codes. 

In undertaking streamlining, governments analyze their building regulatory process, gather input from stakeholders, identify strengths and weaknesses and determine how to make their process more efficient or “streamlined.” After burdensome regulatory requirements, including overlap and duplication are addressed; local governments can focus on improving their administrative procedures to reduce the time it takes a new building or building renovation to move through the regulatory process.  Areas for improvement often include permit application processing, plan submission and review, and scheduling and conducting inspections. The application of information technology (IT) is a common way for local governments to streamline their process. 

Why should local governments streamline?
In an article titled Is the Economy Threatening Building Code Effectiveness?, in the August 2011 Building Safety Journal Online, authors Mike Waters and Ralph Dorio of ISO Risk Decision Services state:

“…analysis of BCEGS [Building Code Effectiveness Grading Schedule] data reveals that the revenue-to-expense ratio of local building code enforcement agencies is dropping. That means future budgets will be even harder to balance – leading to staffing and workload issues. Local community officials will need to make critical decisions to retain the integrity of the essential mission of code administration.”
Burdensome and complicated regulatory processes can drive business out of town. A study published by the U.S. Department of Housing and Urban Development states:

 “In the early 1990’s, jurisdictions in the San Jose/Silicon Valley region were surprised when several large information technology firms moved their operations to Austin, Texas. Leadership flew to Austin to learn why. One of the major factors contributing to attracting firms to Austin was a streamlined building codes administration and enforcement program that reduced the amount of time (and cost) for processing permits, gaining plan reviews and conducting inspections.”  
According to the Alliance “it is about increasing the efficiency of modern construction codes, rules and regulations and reducing the amount of time it takes to move a new building or building renovation through the regulatory process by as much as 80% annually saving both the private and public sectors tens of billions of dollars.” A response to a survey conducted by the National Conference of States on Building Codes and Standards (NCSBCS) and the Alliance provides evidence that streamlining worked in Ventura County, California. Ventura County noted that for their investment of $160,000 for a permits and inspections software package, the County had saved over $1,000,000 in costs and reduced staff by 3 people while their workload increased by 80% over a 6-year period. Furthermore, the final report from the survey stated:

“Jurisdictions of all sizes ranging from Los Angeles, CA (population 3,649,000) to Cobleskill, NY (population 4,533) provided data documenting reductions in processing time from 20% to 80% with the application of information technology to one or more codes administration and enforcement processes.  Jurisdictions also reported marked improvements in their relationships with their clients/stakeholders (the construction industry, citizens, and their elected officials).”
Streamlining is one means by which local governments can cut costs while improving services.  By injecting the importance of energy code compliance into the streamlining discussion, local governments can incorporate it as they undertake streamlining initiatives. 

The IMT report on streamlining is published here: http://www.imt.org/resources/detail/streamlining-compliance-processes

For more information on the Alliance for Building Regulatory Reform in the Digital Age visit: http://natlpartnerstreamline.org/.