By Regulatory Reform Team • February 18, 2015

Cities should understand the purpose of regulation. To do this, cities should ask themselves:

  • How and why is a restriction on a transaction or a business imposed?
  • How can regulations be as simple, fair and enforceable as possible?
  • Is the cost of regulation greater than the benefit it creates for the community?
  • How are existing regulations assessed or evaluated for continued relevance?
  • Is existing regulation lacking or excessive in some manner?
  • Do regulations increase quality of life and provide public value?

PRINCIPLE 1

Establish a set of overarching principles that will guide the city's utilization of regulation

Local governments should recognize the role of regulation in the city and share that understanding with departments, stakeholders, small businesses, and residents.

Value Proposition & Potential Barriers

  • Value Proposition

Overarching principles will establish a common understanding throughout the administration and the public realm of the role of regulation in ensuring public health and safety.

  • Potential Barriers

Entrenched interests who use regulation as a barrier to entry in the marketplace; lack of effective voice for harmed consumers; cultural resistance; and resistance to systemic change.

Best Practice Examples in Local Government

  • Indianapolis, IN

In the early 1990s, Mayor Goldsmith of Indianapolis created a Regulatory Study Commission and established five principles to guide the city's regulatory reform efforts:

  1. Regulations must be simple, fair, and enforceable;
  2. The cost of the regulation should be no greater than the benefit it creates for the community;
  3. Regulations must never exceed federal or state standards, unless there is a compelling and uniquely local reason;
  4. Regulations should only be used as a tool of last resort when government is trying to achieve a policy objective; and
  5. Regulations should be written to ensure the imposition of the fewest possible constraints on businesses.

PRINCIPLE 2

Articulate why there is an imperative to regulate or deregulate

When rules are required, local government must understand what goal the rule will achieve, whether greater efficiency, safety, or equity, or an amalgam thereof. By understanding the imperative to regulate in a given circumstance, the city can assess potential regulatory approaches and develop a public narrative that is transparent and informative.

Value Proposition & Potential Barriers

  • Value Proposition

Articulating the goal and objective of the regulation will provide transparency to city government and the public. In addition, it will link the incremental regulation to the principles (if in place) that the city has committed to.

  • Potential Barriers

Cultural resistance; resistance to systematic change.

Best Practice Examples in Local Government

  • New York City, NY

In New York City, the Taxi and Limousine Commission identified availability of yellow taxis and service quality, passenger safety in areas underserved by yellow taxis as problem areas that required reform. The reason for each reform focus was communicated to the general public. For example, the city focused on availability because 97 percent of yellow taxi pick-ups occurred in the Manhattan Core and at airports, and only a small percentage of pick-ups occurred in the outer boroughs.

PRINCIPLE 3

Compare options for solving the problem using data and stakeholder input

Local government should conduct an informed analysis to identify the best approach to accomplish the policy objective. The city should relate these goals back to the mission statement or principles (if in place) and the specific safety, efficiency, or equity matter to be addressed. When possible, the stakeholders to the problem - both private and public sector - should be given the first opportunity to propose a policy solution or regulatory approach.

Value Proposition & Potential Barriers

  • Value Proposition

Ensuring the best approach will create a more streamlined and efficient process. In addition, the policy objective will likely be reached with fewer unintended consequences. Using data and an analytical approach will provide greater confidence in the regulation.

  • Potential Barriers

Advantaged groups or businesses who are resistant to systematic change; lack of technical skills; lack of data and information needed to make comparisons.

Best Practice Examples in Local Government

  • State of New Mexico

New Mexico began working with the Pew-MacArthur Results First Initiative in 2012 to take a closer look at programs across a range of policy areas. By using cost-benefit analysis, New Mexico policymakers can now see estimates of the costs of adult and juvenile crime, child abuse, and substance abuse. But having that information takes policymakers only halfway to a solution. Lawmakers are also able to see the costs of any prevention or intervention program and evidence that it works. Results First’s cost-benefit analysis model has helped legislators make decisions based on evidence rather than anecdotes, transcend partisan gridlock in enacting effective responses to major challenges and opportunities, and recognize that the most politically expedient options may not be the most cost-effective in the long run. (Source: Pew-MacArthur Results First Initiative, Advancing the use of innovative, cost-benefit analysis to drive state investment in proven policies and programs).

PRINCIPLE 4

Require agencies to perform a regulatory look-back, using a systemic approach, to measure regulatory results and to evaluate processes; Create a stretch goal that requires the city to review a specific number of regulations in a particular time frame

Using a systematic approach, local governments should regularly perform a ‘regulatory look-back’ to assess the validity and efficacy of existing rules and policies on small business.  Cities should create a stretch goal for the look-back and publish the goal publicly. Results of the ‘regulatory look-back’ should be posted online for other agencies, residents and small businesses to review. Cities should also provide a timeline for the look-back and an easy way for agencies to submit feedback.

Value Proposition & Potential Barriers

  • Value Proposition

Establishing a standard look-back process will help cities identify regulations that have not met the intended policy goals, that are outdated, or that can be streamlined. Stretch goals and achievements should be reported publicly and posted online.

  • Potential Barriers

Lack of a framework for systematic change; lack of resources (human capital); lack of technical skills; lack of data and information.

Best Practice Examples in Local Government

  • State of Rhode Island

In 2012, Rhode Island passed a law that mandates agencies to review a quarter of their regulations every year over the next four years, or until all are reviewed, to determine which are redundant or ineffective.  In Washington, DC, a Regulatory Reform Task Force was introduced in 2013. Its first task was to review existing regulations.

PRINCIPLE 5

Establish performance metrics to measure the efficacy of specific regulations and share results publicly

Metrics should be established, linked to the principles, and consistently measured against results.

Value Proposition & Potential Barriers

  • Value Proposition

Establishing performance metrics will allow city government to understand the effectiveness of existing regulations and apply that knowledge to proposed regulations. Posting this information online will increase transparency between city government, small business and residents. City government will be accountable for developing and implementing effective regulation.

  • Potential Barriers

Resistance to systematic change; lack of technical skills; ability to communicate results for regulations just passed. Metrics will often by definition be difficult but multiple factors may come to bear on a specific problem.

Best Practice Examples in Local Government

  • San Francisco, CA

  • New York City, NY

In 2012, San Francisco, New York City and Yelp partnered to develop the Local Inspector Value-Entry Specification (LIVES) to public restaurant inspection information on Yelp (See an example here). LIVES is an open data standard which other municipalities can use to publish restaurant inspection information to Yelp.

PRINCIPLE 6

Collect ongoing public sentiment and end-user experience using digital tools during the development, implementation and assessment of rules and policies

City government should incorporate public sentiment into the development and implementation of rules and policies in place to achieve specific outcomes. To do this in the 21st century, cities must integrate digital tools to support civic engagement, including online portals and mobile applications.

Value Proposition & Potential Barriers

  • Value Propostion

Increasing civic engagement throughout the regulatory process will support an informed development and implementation process that will address residents’ concerns. Updating residents on city responsiveness increases accountability and trust between city government and residents. Over time, city government can use this information in a predictive approach to target areas with numerous complaints.

  • Potential Barriers

Resistance to systematic change; lack of resources; lack of technical skills; lack of equitable roll-out.

Best Practice Examples in Local Government

  • New York City, NY

NYC Rules website collects resident and small business feedback on existing regulations and proposed regulations before they are passed. In Boston, residents can flag public health and safety concerns using a mobile app called Citizens Connect. The residents are then notified when the concern has been addressed by a city worker.