State of Oregon Department of Consumer and Business Services Building Codes Division. Oregon epermitting
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1 State of Oregon Department of Consumer and Business Services Building Codes Division Oregon epermitting 2011 Category: Cross-Boundary Collaboration and Partnerships Project Managers Lori Graham, Building Codes Division, DCBS Chrissie Deibel, Building Codes Division, DCBS Royce Trammell, Information Management Division, DCBS June 1, 2011
2 Executive Summary Background In 2003, Governor Ted Kulongoski issued an executive order on regulatory streamlining. In support of this initiative, the legislature passed bills in 2003 and 2005 to allow the Department of Consumer and Business Services (DCBS), Building Codes Division (BCD) to assess the feasibility of developing an electronic permitting system available for use by all 134 city and county building departments statewide. Online construction permitting supports the governor s economic development goals by streamlining permitting practices across the state, making it easier to do business, saving the construction industry time, resources, and money it could otherwise invest in growth, and creating a more predictable construction process. A state based pilot project to prove the concept at a regional level was successfully completed in 2005 with the cities of Beaverton, Hillsboro, Milwaukie, and Portland, as well as Clackamas and Washington counties. The state decided to grow the pilot project by adding additional partner jurisdictions, and hired a consultant to conduct a comprehensive study in The study determined that a statewide electronic permitting system for construction permits would provide numerous benefits to the industry. As a result of the successful state based pilot project and the consultant s study, the legislature passed and the governor signed a bill in 2007, authorizing and funding a statewide system and expanding the state based pilot project into a permanent ongoing program. The state subsequently: Established and staffed a project team; Contracted with Accela Automation for hosting and implementation of the Oregon epermitting system, based on their best-in-class permitting software; Migrated from a home-grown state based pilot system to the new Accela hosted solution, the 33 jurisdictions who participated in the state based pilot; Worked with cities and counties to establish a workgroup and priority list of jurisdictions to be implemented as full-service jurisdictions in the new system. Current Status and Innovation In August 2010, the new Accela solution was successfully implemented at the full service level, with the first upgrade from basic to full services in the City of Springfield. The City s customers can now apply for permits, submit plans, and request inspections via the web portal. The City is now able to perform back office permitting functions, including permit approval, plan review, and inspection scheduling and tracking. The Accela-hosted full-service solution will save the City software license fees and staff costs, associated with managing and hosting the old system and software. Through this project, DCBS has established the nation s first statewide electronic permitting system for construction permits. In addition to Springfield, DCBS is currently in the process of bringing eight additional full-service jurisdictions onto the system, and has future plans for the remaining jurisdictions in the state to also join the system. 2
3 Description Problem Statement: The State of Oregon has over 134 building departments that issue as many as 800,000 permits annually. While there is a single overall state building code, each jurisdiction can and often does have different processes, time lines, requirements, fee schedules, and staffing levels to ensure compliance with the code. The current structure and various processes can be confusing, cause project delays, waste staff time and effort, and lead to non-compliance with laws by builders and homeowners. This project is aimed at improving the safety of Oregon citizens and the vitality of the building industry, by making it easier for builders and homeowners to understand and comply with building codes and the building permit processes within the state. Historically, each building permit required a separate paper application filed with the appropriate building department. For the builder, this meant repeated phone calls and trips to the building department to ensure that each component of a project was properly reviewed, and permitted, and received a timely inspection. These trips were especially disruptive when the building department was located in another city or many miles from the jobsite, a common occurrence in rural Oregon, where builders might spend an entire day travelling to seek plan approval and purchase the permits. All of these interactions must take place in accordance with the builder s construction schedule. Because later phases of a construction project cannot proceed until earlier phases have been completed, a builder must carefully time the permitting, as well as the review and inspection of each component, to keep the overall project on schedule. Unexpected delays in permitting or inspection can threaten the entire building timetable. Given all of this, it s obvious that builders would have a strong interest in making permit applications, plan reviews, and status updates available over the internet. In the early 2000 s, several Oregon building departments began offering permits online. Unfortunately, these efforts were inherently fragmented, as illustrated below. Assume that the city of Eugene offers permits online. Its permits are only valid for construction inside the city limits. A builder based in Eugene that is working on a job in nearby Albany would have to travel to Albany s building department to purchase permits for that job. Eventually, Albany might sell permits online as well, but builders had no guarantee that Albany s system would work like Eugene s or even provide comparable services. Oregon s builders were faced with a potential patchwork of disparate online permitting systems and in-person paper-based legacy systems. Another key issue for builders is knowing which jurisdiction to go to for a permit. For example, the Portland metropolitan area like any large city is a cluster of close-knit cities with meandering borders. It s not uncommon for one side of a street to fall within the boundaries of Portland, while the other side may be in the neighboring Gresham city limits. There are 27 different building jurisdictions in the Portland metro area alone. Making things even more challenging, several Oregon cites assumed the permitting process for some, but not all, categories of permits. Thus, a builder needed to purchase an electrical permit from the county building department, and the corresponding structural permit from the city building department. In the past, determining exactly 3
4 which permits needed to be purchased from which department or jurisdiction could be quite difficult. Barriers: A number of potential barriers were identified during the initial project planning phase, and were resolved as the project moved forward. Ensuring Sound Cost Estimates and a Stable Funding Mechanism: Willamette Consulting worked with stakeholders, vendors, state staff, and experienced consultants to create a cost estimate for the project over the planned 11.5 year implementation phase. The construction and operational costs of the solution were presented to stakeholders for a cost/benefit review. The funding barrier was solved legislatively through a 4% surcharge on all building permits issued. Standardizing Permitting Processes and Business Rules: A group of interested jurisdictions began meeting to develop a standard set of business rules that everyone could adopt, including inspection codes, number schemes, processes, etc. The system was designed around these rules and standards, and is modified as additional recommendations evolve. Selecting and Contracting with the Best Vendor: A robust Request for Proposal process attracted bids from the top three (3) vendors. After extensive negotiations, a contract was executed with Accela Automation, the largest epermitting vendor. Ensuring Jurisdictions Participate: In addition to the success of the state based pilot project, a number of education and outreach efforts have led to a growing queue of over new 40 jurisdictions wishing to join the system. Enticing Builders to Use the System: The Baseline and Changes in Metrics Table below reflects the initial system usage by builders and the growth overtime. Assessment and Decision Process: In 2006, DCBS commissioned Willamette Consulting to study the feasibility of a statewide epermitting System. The consultant assessed each jurisdiction s business requirements, researched software solutions, and created cost models. To evaluate the needs of local jurisdictions, the consultant conducted a survey of building officials to gather information about current permitting processes and capabilities. Four town-hall styled meetings were conducted throughout the state to discuss the project with local jurisdiction staff, and gather additional business/informational requirements. Afterwards, interviews were conducted with a representative sample of jurisdictions to determine the current technology requirements and limitations faced by local governments. Solutions: Based on information provided by jurisdictions, the consultant identified four potential software solutions for a single statewide epermitting system including: 1) Procurement of Commercial Off-The-Shelf (COTS) software; 2) A public/private software development partnership; 3) Transferring a system from another multi-jurisdictional agency; and the 4) Creation of an open-source community. After reviewing these options, the consultant recommended the commercial-off-the-shelf (COTS) software because it best met the project requirements, had fewer risks, would be operational 4
5 sooner, and was not significantly more costly than the other three potential solutions. Vendors from each of the four potential software solution areas were invited to show their products, and demonstrate how they would address the unique requirements of a statewide solution. Cost estimates were developed for each of the four potential solutions based on a project duration of 11.5 years. The total cost of the project was estimated to be $51.7 million. After this review, the COTS software was selected. Length of Time in Operation: The state based pilot project conducted in 2005 with state built software, included 4 cities and 2 counties. This expanded over four years to include 33 jurisdictions. In 2008, the state procured the new Accela solution, which includes the Accela software (web portal and back office permit system), and the hosting service to run both systems. In the new Accela environment, Jurisdictions can choose between two levels of hosting services. The first level, Basic Service - allows customers to apply for permits via the web portal. The second level, Full Service - includes additional web portal functions such as plan submittal, and inspection requests. The Full Service level also provides, back office permitting functions such as A) permit approval, B) plan review, C) inspection scheduling, and D) tracking. Jurisdictions now have a choice in service level. The state based pilot project jurisdictions were migrated into the new Accela web portal environment in June 2009, and provided with the same basic capabilities, as well as enhanced functionality through the new web portal software, and available hosting services. See the Baseline and Changes in Metrics table below. In August 2010, the new Accela solution was successfully implemented at the fullservice level. The City of Springfield became the first jurisdiction to move from an Accela basic to a full-service level, adding online plan submittal and inspection requests to the web portal, and migrating onto the Accela permitting system all of their back office permitting functions. Since the city went live, 40 percent of Springfield s construction permits have been sold on-line through the portal. Baseline and Changes in Metrics: Year Jurisdictions Permit Applications Revenue state based pilot (basic services) 3,530 $ 346, state based pilot (basic services) 7,981 $ 818, state based pilot (basic services) 18,424 $1,836, state based pilot (basic services) 20,328 $2,192, Accela Solution (basic services) 18,907 $1,941, Accela Solution (full services) 18,424 1 $1,924,430 1 TOTALS 87,594 1 $9,059, (11 months reported for 2010) Innovative Characteristics: Establishing the nation s first statewide electronic permitting system for construction permits is revolutionary in its own right. However, the true epermitting innovation lies in 5
6 the way that the program has been implemented. Oregon has 134 different building departments, each with unique forms, processes, and procedures for administering the permit process. Some departments use fully electronic systems, others rely entirely on paper, and most are somewhere in between. At the beginning of this project the state was faced with 134 different business models, each of which would need to be adapted to the confines of a single enterprise solution. The easy fix would have been to develop a single statewide epermitting product and require each building department to adapt to the product. However, from inception, Oregon s epermitting project was intended to create a voluntary partnership between state and local governments. Instead of a one-size-fits-all solution, the state selected a solution that was as dynamic as the industry it regulates. Using Accela software as a base, epermitting technical staff analyzed each jurisdiction s operations and individually customized the product for the jurisdiction s existing business practices. For example, in mountainous areas of the state where flash flooding is common, many communities have elaborate land use regulations that determine whether a structure may be built on a floodplain. Building departments in these areas generally won t process a permit application without evidence of zoning approval. To address this issue, epermitting staff will work with the local building department to learn the floodplain rules and incorporate them into the online permit application process. In addition, they will customize the software for each building department s unique fee structure, as well as plan review and inspection requirements. To address the challenge of knowing which jurisdiction offers which permits, the epermitting system uses a combination of GIS data and other property records to determine which building departments have authority over which permits at each address. Because the user inputs his address first, there is never a danger of applying to the wrong jurisdiction. Where jurisdictions overlap, the system automatically considers the address and routes the appropriate data for each permit as needed. Leverage and Transferability: This Oregon epermitting project aligns with the NASCIO State CIO priorities in the areas of: consolidation/optimization, budget and cost control, shared services, and legacy modernization. In addition, a majority of other states face the same issues that Oregon is aiming to solve, and a number of those states have expressed an interest in following Oregon s innovative lead. The vendor recognized this potential market, modified their base product to support permitting at a state-wide level, and is now actively marketing to other states. Communications Plan: In addition to the town hall forums mentioned above, the project team used existing relationships with stakeholder groups to communicate project status, seek additional participants, and resolve issues. This has been an effective strategy as seen by the backlog of jurisdictions waiting to join the system, and the increasing usage of the system by builders throughout the state. 6
7 Significance: This project will eventually impact 134 counties and cities, and potentially all builders, architects, building engineers, and homeowners in the state of Oregon. A study conducted in 2006, identified the wide variety of permitting systems that were in use by Oregon cities and counties. Potentially all of those permitting systems can be replaced by this single state sponsored system. Per the consultant s analysis prior to project approval, if even half of the state s jurisdictions were to become participants in the new system, significant benefits and cost savings to local governments of over $60 million were projected over the 11 years of the project lifecycle. Benefit of the Project: The new Accela environment implemented through this project solution provides builders and other users with the ability to apply, pay for, and receive building permits on-line through a single web portal, delivered by the state for use at the local government level. Funding for this project is provided through a specific buildersupported surcharge paid on all building permits statewide. The system is administered by the state, while still allowing jurisdictions to manage their own information and apply jurisdictional specific business rules. The system enables and provides the following: Match addresses to jurisdictions, permits, and inspections. Web-based o submittal, payment, and receipt of permits. o intake, tracking and support of plan reviews. o scheduling, tracking, and reporting of inspections. Project tracking of construction and permit activity from plan review through final sign-off by Jurisdiction and builder/home owner. Business and requirements analysis at the Jurisdiction level. Implementation services at both state and participating jurisdiction levels. Technical / helpdesk support and training at both state and jurisdiction levels. This project benefits not only the state of Oregon, but other states who have expressed an interest in following Oregon s innovative lead in establishing the nation s first statewide electronic permitting system for construction permits. Cost Analysis and Comparison: Individual Systems in 53 Jurisdictions vs. a Statewide System 53 jurisdictions: each w/ e-permitting system Estimated Aggregate Costs Single Statewide System 130 jurisdictions Estimated System Costs Start-up Annual Costs Costs over an Start-up Cost Avg. Annual Project Costs Item Costs Year 1 Maintenance 11 year period Costs Year 1 Costs 11 year period Software Costs $ 22,839,484 $ - $ 22,839,484 $ 386,470 $ 273,393 $ 3,007,480 Software Maintenance $ 991,315 $ 991,315 $ 10,904,470 $ 49,438 $ 552,114 $ 5,756,278 Hardware Costs $ 3,165,327 $ 527,555 $ 8,440,873 $ 99,539 $ 28,638 $ 377,059 Training Costs $ 3,534,504 $ - $ 3,534,504 $ 129,279 $ 40,988 $ 522,759 Staff & Consulting $ 38,319,265 $ 2,782,500 $ 66,144,265 $ 1,634,185 $ 4,073,112 $ 42,069,405 Total $ 68,849,896 $ 4,301,370 $ 111,863,596 $ 2,298,910 $ 4,968,245 $ 51,732,979 7
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