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Nov 28th
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City Government 2.0

news1-1City of Santa Cruz proposes an online business permitting portal in a nationwide contest

In the very near future, long days spent at City Hall trying to get the right information from the right department could be replaced by navigating a single website. The City of Santa Cruz is pitching its tech-smart reputation in a grant proposal that could land the city as much as $5 million for a web-based information service for new business start-ups.

Aimed at making the business permitting and licensing process more accessible to entrepreneurs and new businesses, the City of Santa Cruz is submitting a proposal to the Mayors Challenge, a competitive grant opportunity funded by New York Mayor Michael Bloomberg’s philanthropies, with one $5 million grand prize and four $1 million prizes.

The core of the city’s proposal is to expand a web portal called OpenCounter, which will “provide those who know virtually nothing about the business permitting and approval process with as much information as possible, and help coordinate the various issues and departments involved in the permitting process,” says Scott Collins, assistant to the city manager, who led the preparation of the city’s proposal. 

The goals of Bloomberg’s Mayors Challenge is to recognize and replicate innovations in city government that “address a major social or economic issue, improving customer service experience for citizens or businesses, increasing government efficiency, and/or enhancing accountability, transparency, and public engagement,” according to the Bloomberg Philanthropies foundation. The Santa Cruz City Council was expected to approve the grant proposal at its Tuesday, Sept. 11 meeting, just in time for the proposal deadline on Friday, Sept. 14.

OpenCounter, now in a testing phase with city staff, is designed to be easy to use by business people who are not familiar with the intricacies of zoning, public health requirements, building codes or parking requirements.

“The goal is making the processing requirements clear, reducing any friction and duplication in the process, and hopefully reducing misunderstandings and delays in the business permitting process,” says Collins. “It’s important to point out that the tech will not get in front of the [permitting] process, the tech should better serve the permitting process.” Collins says the portal will also include information about currently available retail, office and commercial space.

The Mayors Challenge proposal builds on work already done on the OpenCounter web portal, which is the product of another tech-based initiative by the city’s Economic Development/Redevelopment Agency late last year. The city was successful in its application to become a project city for Code for America, Inc., a new, nonprofit corporation that matches technical skill to projects proposed by municipal governments.  

Called a “peace corps for geeks,” Code for America marshals the talent of mostly young computer programmers and engineers—now working in 10 project cities across the country—to come up with tech-savvy solutions to city problems. Code for America, Inc. was launched by several, mostly Silicon Valley-based foundations in 2010.

Because of more than seven months of work by Code for America fellows who have been designing the OpenCounter web portal for the city since February, city staff and Mayor Don Lane believe the city has a good running start for the Mayors Challenge grant.

Lane believes the online hub could remedy some longstanding frustrations in the community. “OpenCounter doesn’t change our rules or review process, but it does reorient an entrepreneurs’ relationship to them,” Lane writes in an email to GT. “By presenting and collecting data in a logical, plain language fashion, OpenCounter will help to reduce confusion, set realistic expectations and help more people achieve their dream of opening their own business in Santa Cruz.” 

Ben Sims, a 37-year-old native of Santa Cruz, has been working with the city to open a pizza restaurant on the Westside and is a prime example of the entrepreneur OpenCounter is designed to serve. Although Sims says most of the planning and building staff were helpful, getting the restaurant approved was a daunting process. With an initial cost estimate of traffic impact fees and other public works improvements in the neighborhood of $80,000, Sims needed to hire a traffic engineer to show traffic impacts would be less than projected, and hire an architect for the tenant improvement plans. The city ended up reducing and assisting Sims with the traffic impact fees. “It would be great to get a realistic estimate of the business permitting costs at the front end of the project, if only to avoid big surprises later on,” Sims says. 

news1-2Assistant City Manager Scott Collins worked on the city's grant proposal for the Mayors Challenge contest. The city’s proposal highlights how OpenCounter could be expanded with the grant award. The Mayors Challenge proposal makes clear the city hopes to add more features and build up the website to potentially include residential construction, Greenfield developments and other land use entitlements. The city is also hoping permit payments can eventually be made and processed through OpenCounter.

Bill Tysseling, executive director of the Santa Cruz Chamber of Commerce, was involved in meetings with the OpenCounter/Code for America project, and says he is “pleased with the effort” to make city permitting requirements available online and is hopeful the project will grow incrementally to include more services and information.

“Over time it should give Santa Cruz a competitive advantage over other cities if Santa Cruz is in the front of the line getting OpenCounter up and running and it is efficient and accessible,” Tysseling says. “Hopefully it can be expanded to eventually include the digital submission of building plans, and even online applications for non-controversial Use Permits.”

Tysseling goes on to say that landing tenants for retail space is not typically a big problem in Santa Cruz, especially downtown, but second and third story office space is leasing at a much slower pace. “We have something like over 175,000 square feet of office space currently available for lease,” Tysseling says. “Now that’s problematic— and somewhat reflects the glut of office space available in Silicon Valley.”

After facing the “perfect financial storm” of the Great Recession, including increasing costs, diminishing tax revenues and state raids on previously budgeted funds, the city has managed to reduce an $8 million General Fund operating deficit projected a few years ago to a $2.9 million deficit projected in the 2012-2013 budget, according to the City Manger’s Budget Message to the city council last May. 

After the state-mandated dissolution of Redevelopment Agencies, the city lost its primary funding vehicle for economic development. The overall reaction of the city has been to do more with less, reduce positions and employee salaries and benefits, and assume a much more business-friendly posture than the city has been known for in the past.  Much of the recent effort to expand the city’s tax base through new business development has been focused on the OpenCounter project. 

“Most government websites are structured like a phone book,” Lane continues in his email. “But OpenCounter is made to be a toolbox for entrepreneurs. Using plain language, OpenCounter explains the process of opening a business and helps get the right information to the right places in the right order. We know that this will have a huge impact on the small business community and hope that the Bloomberg Philanthropies recognize that impact.”   

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