Cutting Back on Red Tape Not So Easy

During the darkest days of the recent recession, businesses cried out for local government deregulation.

As companies big and small packed up for Arizona and Nevada, business leaders demanded that city and county agencies slash regulatory red tape, ease restrictive rules and eliminate scores of burdensome codes that critics contended were making the state economically unfriendly.

Officials earnestly embarked on deregulatory missions. But the results so far have been modest.

Sometimes to their own surprise, officials concluded that the vast majority of land-use, building, safety and environmental regulations need to remain on the books, despite their bad reputation in boardrooms and executive suites.

“My first reaction was that I would be able to find a lot of regulations to cut out,” said Ronald J. Novello, director of the county’s Building and Safety Department, which reviewed more than 1,000 codes for possible elimination.

“Basically, I found that most of these regulations are there to protect the public,” he said. “I found it difficult to eliminate very many of them.”

Asked by the Board of Supervisors last year to identify unneeded regulations, county departments so far have returned with just 26, although the process is continuing.

Deregulation efforts in Irvine and other cities have produced similar results, prompting some officials to reconsider their approach.

Rather than simply focusing on regulations, many government agencies said, they can best serve businesses by streamlining their permitting process, keeping fees reasonable and standardizing business forms and procedures with surrounding jurisdictions.

“The regulations will always be there,” said John Sibley, chief deputy director of the county’s Environmental Management Agency. “How government helps business through the process is really the key to economic vitality.”

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With that in mind, the county as well as several cities have trained workers to be more “business-friendly” and have created special “one-stop” permitting centers designed to simplify the regulatory maze. Orange County’s center, for example, handles permits and other business services not just for county government but for many state agencies as well.

Company executives and trade association leaders praise the efforts but insist government can do much more to help stimulate the local economy.

“There is certainly a heightened awareness on the part of agencies about the importance of streamlining their operations and helping business,” said Todd Nicholson, executive director of the Orange County Business Council. “But I think each agency probably has a significant number of regulations on its books that really don’t serve a valid purpose.”

Nicholson and others suggest that local officials use as their model the state’s deregulation campaign, which was started in 1993 and has removed 4,000 codes from the books.

The state has examined 21,000 regulations so far and plans to scrutinize others over the next year, said Paul Miner, deputy director of the office of planning and research.

Many of the eliminated rules either overlapped with federal regulations or were hopelessly outdated or illogical, he said. One nixed regulation, for example, required that formaldehyde--a known carcinogen--be used in the disposal of upholstered furniture.

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Based on the success of the state review, Supervisor Don Saltarelli requested last fall that county staffers conduct a similar examination of local regulations that could be eliminated or modified.

Like their counterparts in Sacramento, county officials did find a few rules that cried out for removal. The Board of Supervisors last week eliminated eight regulations that had required residents in unincorporated communities to pull permits for such routine jobs as replacing dishwashers, sinks, laundry faucets and other household items.

“This is just the beginning,” said Saltarelli, who expects more deregulation in the coming months. “We now have the county focusing on eliminating unnecessary and burdensome regulations. That’s a very important change.”

County officials said evaluating the hundreds of rules proved more challenging that they expected. Novello, for example, started the process believing the county could eliminate a code requiring residents to get permits before installing water heaters.

But upon closer examination, he learned that an improperly installed water heater could result in an explosion or gas leak, so the regulation stayed.

“It might seem simple, but it’s a real safety issue,” said Novello, adding that the regulatory trend in California is toward stricter building codes that protect against damage from earthquakes and other natural disasters.

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In some cities, officials had the added task of balancing business demands for less government with the desire of residents and elected officials to maintain high-quality construction and design standards.

“The council said it didn’t want to threaten the quality of developments. . . . They didn’t want to stop landscaping streets just because it would be expensive for property owners,” said Sheri Vander Dussen, Irvine’s manager of development services. “They wanted to make sure people were treated fairly and got their applications through in a timely manner.”

With this in mind, Irvine simplified its method for issuing permits, reduced layers of bureaucracy in its planning review process and replaced its confusing business license fee with a flat $50 rate.

Other governments took a similar approach. “Businesses come through the doors thinking they have a mountain of regulations,” Sibley said. “If you can show them through it and help them out, the process really isn’t that onerous.”

In the future, Nicholson and other business leaders hope local agencies will render “political boundaries transparent” by standardizing permit forms and enacting uniform regulations whenever possible. Such changes, he said, would allow businesses to complete forms electronically at a major cost savings.

The state is creating several “permit consolidation zones” that will help speed along the process. Local officials hope Orange County is one of the regions selected.

“There is such a myriad of state, federal and local regulations people have to go through now,” said Supervisor Marian Bergeson, who helped created the permit consolidation plan while in the state Senate. “The costs can be tremendous. It’s something we need to look at.”