(Credit: Pugo Design Studios)
This is the first in a two-part article discussing the current state of the SCAQMD permitting-process backlog. The second part will detail a proposed solution.
Lately I’ve been thinking about how can technology be applied to different areas of business, particularly those that have traditionally been considered subjective. Computing power has increased severalfold over the past few years, to the point where we all expect computers to do more and more.
In 2011, venture capitalist Marc Andreessen wrote a Wall Street Journal article titled “Why Software Is Eating The World,” in which he argues that as more major businesses become software-run, more Silicon Valley-style technology companies are invading and overturning established business.
“Over the next 10 years,” Andreessen writes, “I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.”
However, with the increase in computing power comes a real concern: Will computers replace the need for humans?
As Peter Thiel argues in his book Zero to One, technology should be viewed as a means to provide a complimentary skill set to humans.
Thiel goes on to say, “We’re less good at making sense of enormous amounts of data. Computers are exactly the opposite: They excel at efficient data processing, but they struggle to make basic judgments that would be simple for any human.”
While it seems that technology has given us the promise of a more automated future, we need to think about how we can better use the power of technology to complement the work of business and government professionals.
In next week’s post, I’ll outline a framework for how to approach a well-known problem in Southern California air-quality compliance: shortening the amount of time it takes to get an air-permit approval from the area’s regulatory agency, the South Coast Air Quality Management District (SCAQMD). In the meantime, let’s review the current status of the permitting backlog.
Current Status of the SCAQMD Air-Permitting Process
The website for my company, Envera Consulting, already has a slew of content on air permits, so I won’t repeat myself on that front. One of the most common permit-related questions we get is “How long does it take to get a permit application?”
And that’s a pretty important question. Minutes from the March 3, 2017 meeting of the SCAQMD Stationary Source Committee noted:
Bill LaMarr, Executive Director, California Small Business Alliance, stated that this was the second serious backlog reduction effort, with the other occurring about ten years ago. The inability for a small business to get a permit in a timely manner is very costly. They are paying leases on their buildings, and cannot legally operate until they receive their permit.
In a September 2016 report, the SCAQMD estimated that there are 7,348 open permit applications being processed. It’s estimated that a whopping 3,624 of these applications have been with the agency far beyond the expected processing timelines.
From the data presented, 51.3 percent of the applications have been with the agency for one to five years.
In certain cases, businesses with pending permits are not able to begin operation or construction until the permit is issued. That issue is compounded when a delay in the issuance of a permit causes a delay in the issuance of any building permits issued by a city government.
The reasons why the process takes so long are complex and dependent on a number of factors. The SCAQMD noted 15 chief reasons, including:
- Staff retention and vacancies
- Project complexity
- Insufficient fees and data submitted by the applicant
- Other analysis needed to complete processing
Understanding the exact reason why each permit cannot be processed by the agency could help with the backlog. This would entail assigning one of the 15 chief reasons to each permit in both the working inventory and the backlog to determine what is needed in order to process it.
The March 3 meeting notes also said:
Mr. Nastri stated that the historically high staff vacancy rate was a major factor. In the past, budget concerns had hindered hiring, but lately the agency has been able to reduce the vacancy rate with new hires. As the workforce ages, we are also losing many experienced engineers to retirement. With this in mind, staff will continue to address the vacancy rate.
When it comes to addressing the vacancy rate, two thoughts come to mind: the amount of training it takes to develop new staff and the general loss of institutional knowledge that is associated with employee turnover.
Indeed, the SCAQMD has recognized the first component. The September 2016 action plan notes that “long training [is] required for an entry-level engineer to come up to speed with the necessary experience to tackle the intricacies of the permit evaluation process.”
To the second point, an article on the website HigherEdJobs.com, states that “[w]hen employees leave a job, of their own volition or not, employers lose the institutional knowledge or history that they take with them, and many organizations lack sufficient transfer programs to stem the loss.”
We can combat both the intense training and loss of institutional knowledge due to attrition in the SCAQMD by taking the vast wealth of knowledge created by employees past and present, which exists in the form of approved and rejected permit applications, and converting that to digital data that will live on well after workers move on.
How the SCAQMD Proposes to Solve the Problem
The SCAQMD realizes that the permitting backlog is a significant problem and has put together an action plan, which proposed two solutions.
In the first approach, the backlog elimination would take place over a two-year period at a total cost of $4.4 million. The second approach halves the time frame but comes with the hefty price tag of $11.9 million. Both approaches focus on increasing production related to the processing of permit applications and include measures for more staff, overtime, better training, and automation, among others. Some of the measures are focused on faster ways to get the data into the SCAQMD’s system while others are focused on actually increasing production.
The SCAQMD’s pursuit of automation is particularly promising. Some of the automated solutions include:
- Developing templates for permit applications
- Electronic processing tools
- Electronic permitting systems
- Review of other air agencies’ systems for automation
Analysis of Current Solution
On a high level, the processing of permit applications is indeed an exercise that requires a great deal of professional judgment and mental facility, which means that any measure that is designed to increase employee productivity should consider human factors, such as burnout and increased attrition.
Process-improvement efforts are never easy and straightforward. Although the proposed solution does address the chief causes of the backlog, a true solution is one in which the backlog is eliminated and prevented from forming again, while ensuring that an aging workforce does not impact production and processing abilities.
Processing a permit application involves understanding the operation of a piece of equipment, identifying emission points, understanding the emission quantifying of the equipment, and, of course, understanding the rules and regulations that apply to the equipment. On a high level, a permit engineer must read the content in the application and review the emission calculations submitted with the application, then consider both of those points within the context of the agency’s rules and regulations. But the engineer’s ultimate goal is to determine if the equipment can comply with the SCAQMD’s rules and regulations.
It’s important to remember that regardless of how fast the data can get into the SCAQMD’s system, without adequate production considerations, it’s possible — and likely — that the backlog will rear its ugly head again in the future.
The Bay Area Air Quality Management District (BAAQMD) has an online system that allows certain facilities to submit permit applications and data-update requests, pay invoices for applications and permit renewals, retrieve permit copies, and designate three facility contacts (owner, operator, and billing contacts). Developing such online capabilities is a very ambitious — but necessary — undertaking to streamline our permitting process.
The SCAQMD’s project is expected to take significant time and resources to complete and will be rolled out in multiple phases. While developing basic electronic forms and permit-processing tools is expected to be completed in a relatively short time frame of three to four quarters, the development of online tools for more complex equipment and processes will take considerably longer.
Tune in next week for my proposed solution to the SCAQMD permitting backlog.