regulatory reform I key themes

Florida's challenges and strategic emphasis is (should be) different than it was when its current regulatory system was devised

• the "system" has lost touch with strategic purpose

• the regulatory culture is about barriers rather than progress

• the regulatory structure is largely fragmented and siloed and oftentimes fails to work towards a common mission

• the regulatory process is oftentimes layered and redundant, with local and federal processes, and at times even works at cross purposes

• meaningful change will require flawless management, sequencing and focus on: purpose, strategy, objectives, leadership, structure and execution (in that order)

Why is regulatory reform so important?

Florida in Transition 17

Florida today is

pro oundly different than it was when most of our present regulatory policy and structure was devised.

Our premise:

worldwide influencers

t);press Garden$,

~edca's TFo.p1'tai Woudel'hm.d

• a bigger, older, urban, mobile and diverse population

• challenge of education and recruitment of workforce

• changes of preferences and tastes in quality of living

Our premise:

While the cornerstones of our regulatory framework swelled and entrenched Florida changed.

"They (residents) tell me that when they moved in, it was different place, they're seeing it change, they're seeing it go to hell and they're abandoning it. "

Stephanie Kraft, Broward Co School Board New York Times

August 16, 2009

Dept of Environmental Protection

Our premise:

Dept of Community Affairs

Dept of Transportation .

Dept of Busi.~$.ss~ianc.t Professional ~~gulation

Water Maqa~'lement Districts

Regional Planning Councils

Florida Wildlife Conservation Commission

Now, many policies, agencies and jurisdictions overlap or are redundant

• Much of the regulatory framework, mindset and culture has lost its focus and purpose.

• It is regulating a place and a set of issues that are no longer our most critical concerns.

Emerg.$hCY 'Manag~rnent

FinancialRegulation Agriculture Citrus

Children and Families

Corrections

Education Military Affairs

. Veterans Affairs

Elder Affairs

Plnancial Services Enterprise Florida Health Care Administration

Health Highway Safety Law Enforcement

Lottery lnsurance Regulation Workforce I nnovation

Board of Education

More

Florida in Transition 20

Our premise:

it even has contributed to many of the challenges that we face today.

• inconsistent regulatory process

• over built real estate

• overburdened debt

• historic unemployment

• under-trained workforce

• outdated energy platform

• behind the curve water supply

• urban sprawl

• outmoded infrastructure

• congested highways

• disinterested private sector

Is Florida Over?

Wall Street Journal September 29, 2007

C'oudy Outlook

Long a boom state, Florida is now S{!l:in9 a Slowdown in growth.

PopulatIon growth Moving in

Chang,= from a decade earlier Net rniqratfon to Floridil~'

l(}~'. . .. .. . .. .. . .. . .. ,....... 300· .. .. . ..

• Florida III U,S.

&:> .. ' .. . .. .. .. .. ... . .. .... .. .. .. ... ...

: \ .• .. . I ", ' ff~:~5o~~~r

150'~ \. s\lItes)

100· ~. Intemational 50. .. .. .. ...... . ...... (from othH countnas)

Florida in Transition 21

ft)...... . .

-0 ~ 'I 4" i 1-1 I j+ I I ' j , I I I

''11 '95 '00 '(]5

isio '20 '3:0 '40 '50 '60 '70 -ee '90 2000 '06

"The difterence bEtl~en migr.mts mD'IIng in and mOl'ing DUt.

Florida in transition

change will be hard

we have to tell a bigger story not about regulation but about the future of Florida

from growth management to growth leadership

Process

• 20 days!

• Overall Objective: get Florida back to work

• Measures of Success for 7-Step Economic Program ~ Total job growth in Florida will accelerate

-7 The number of new business start-ups will increase

-7 Wages and salaries will grow

-7 Productivity and vitality of Florida's economy will soar

-7 $7B savings/year

• What can have the greatest impact the fastest??

Direction

• Think outcomes / effectiveness - what is the outcome we desire?

- don't get bogged down by "old paradigm"

• Focus on operations too / efficiency - efficiencies

- leadership & culture

• Be bold / strategy + leadership

Team

Chris Carr, Chair

Matt McClus Staff Lead

Regulatory Barriers to Job Growth

Community Affairs

Environmental Protection

Business & Profess ional Regulation

Tort Reform & Insurance

Peter Corrigan Carlos Alfonso Rich Crotty T.R. Hanline Ashton Hudson Stephen Joost Peter Rummell

Billy Buzzett Ken Wilson Gerry Seeber

Doug Manson Carlos Beruff Chris Buckley Rick Bu rgess

Tracy Duda-Chapman Caleb Grimes Albert Joerger Barbara Miedema Melissa Meeker Mike Taylor

Ann Shortelle

Richard Clark Peter Boulware

William Large Don Brown Marlin Hutchens Marc Salm Corey Simon Phillip Walker

Today

I. Big Ideas

II. Big Moves

• Regulatory Barriers to Job Growth

• Community Affairs

• Environmental Protection

• Business & Professional Regulation

• Tort Reform

III. Final Thoughts & Conversation

Key Principle

Meaningful reform cannot be achieved unless it is synchronized with Florida's economic development strategy

Florida's greatest challenge right now ls not regulatory red tape, it is:

• the condition of its global identity and "brand"

• the condition of its cities

• failed leadership

• lacking economic development leadership and apparatus

Big Idea

Define Florida's optimal strategic position in the global economy and rebuild its regulatory system as a tactical cornerstone of execution

Big Idea #1- restructure lithe company" (cant)

What business are we in?

"Innovation distinguishes between a leader and a follower."

- Steve Jobs

-- . i!!!!!. "

Computer manufacturer

Digital lifestyle

Florida In Transition 31

Big Idea #1- restructure "the company" (cont)

Plan of Action (day one)

• Develop a plan of communication (road show) around the "new Horlda" and "restructure the company" metaphors (Florida 2.0?)

• Freeze all staff positions and policy making works efforts - be clear that action will take place only after the mission of lithe company" is clarified

• Define and launch phase one (GO-days) (privately funded?) strategic process to define Florida's business strategy executing multiple parts simultaneously including:

Present Strategic Real Estate Urban Metro Incentives Infrastructure Natural
Identity Position Strategy Strategy Resources • Gov-elect as executive sponsor and engaged leader of work effort

• Seek appropriate investor partners

• Convene at end of work effort and determine conclusions and next steps

Plan of Action (immediately following above)

• launch regulatory framework work process (phase two of above) which key emphasis may include (illustrative only):

.... - - - - - - ..... - - - - - - ..... - - - - - - ..... - - - - - - ..... - - - - - - ..... - - - - - - ...

I II II II II Permitting II

I WMD's/DEP II State/Federal II District II Leadership II Strategy for II Structural

I overlap II Overlap II Alignment II Model II Real Estate II Architecture I

I II II II II Portfolio II I

1- 11 '1 '1 11 ~ 1 I

Florida in Transition 32

Big Idea #1- restructure "the company" (cant)

Plan of Action (immediately following above, cont)

• On conclusion, develop state legislative strategy

• Develop federal strategy

• Recruit new leadership

• Go operational

Why do we always talk about regulatory reform but never make any progress? because the system is too entrenched

and politicians rarely have patience to understand it or take it on so we incremental-ize our approach to it

and the frustration continues

The only way to do it right is to IIrestructure the company!"

Florida in Transition 33

Big Idea #2 - alignment

Key Principle

Rebuild and align Florida's regulatory structure with its economic development and quality of life mission

Goal

Superior business climate and identity in the global competitive landscape

Big Idea

Redesign and reshape Florida's regulatory policy, leadership, culture and structure to align with, and drive towards, Florida's optimal strategic position

Execution

As phase two of business strategy or incrementally/concurrently

.......

c Q)

E

c 0>

«

Economic Development Mission

Florida in Transition 34

Big Idea #2 - alignment (one example)

Condition

Silos

Duplication and overlap Cross pu rposes Misaligned cultures

Florida In Transition 35

Big Idea #2 - alignment (one example)

Condition Silos

Duplication and overlap Cross pu rposes Misaligned cultures

First Step (week one)

Report DOT, DEP & DCA to common leader with one common mission

STEP ONE

Common Mission

I

Common Leadership

I

Florida in Transition 36

Big Idea #2 - alignment (one example)

First Step (week one)

Report DOT, DEP & DCA to common leader with one common mission

STEP TWO

Next Step (2011 legislative session)

Combine DOT, DEP & DCA into one organization

Dept of Growth Leadership

Condition Silos

Duplication and overlap Cross purposes Misaligned cultures

Common Mission

I

Common Leadership

I

Florida in Transition 37

Big Idea #2 - alignment (one example)

First Step (week one)

Report DOT, DEP & DCA to common leader with one common mission

STEP THREE

Next Step (2011 legislative session)

Combine DOT, DEP & DCA into one organization

Dept of Growth leadership

Condition Silos

Duplication and overlap Cross pu rposes Misaligned cultures

Common Mission

I

Common Leadership

I

Next Step (balance of 2011) Restructure for operational efficiencies and effectiveness

Florida in Transition 38

Big Idea #2 - alignment (one example)

Condition Silos

Duplication and overlap Cross purposes Misaligned cultures

First Step (week one)

Report DOT, DEP & DCA to common

leader with one common mission

Next Step (2011 legislative session)

Combine DOT, DEP & DCA into one organization

Next Step (balance of 2011) Restructure for operational efficiencies and effectiveness

Next Step (2012 legislative session)

Integrate other agencies as determined by mission and evaluation

STEP FOUR

Common Mission

I

Common Leadership

I

Dept of Growth Leadership

f······· ... · .. · .. · ....... ··- .. · .. · .. ~4·1 f .. ················ .. ·~·······~ f···· .. ·········· .. ···········~

i RPC/s ! I FWC II WMD's i

.................................. , , .

Florida in Transition 39

Big Idea #3 - reshape purpose

What does a 2011 paradigm look like?
From: To:
growth management ) growth leadership

infrastructure to accommodate infrastructure to compete in a
)
growth global economy
regulatory policy objective to regulatory policy objective to
) help make good development :::l
E stop bad development ('[)
b.O happen ::E
""'0 "'0
ro Q)
~ ,
ro Q)
Q.. planning framework to fill up the planning framework to create c,
"'0 OQ
0 state with people ) high quality places for people 3
protecting individual natural protecting ecosystems as part
of our global identity and vision
)
areas for higher quality of life
coordinated regulations
layers of redundant regulation ) focused on achieving a

common outcome
each agency with its own ) . .
. . one common mission
mission Florida in Transition 40

Big Ideas - conclusion

then execution

Takeaway Points sequencing is critical

strategy comes first

then leadership and mission then objectives

then structure

Big Ideas (summary)

• Define the mission and "restructure the company"

• Restructure regulatory framework to support new "company" mission

• Recruit leaders as part of building new company

Output

• Executable business strategy

• New regulatory structure

• New leadership and culture

• Reinvigorated global identity

• Re-energized business climate

• New investors, jobs and economic renewal

Florida in Transition 41

Regulatory Barriers to Job Growth

FOUR BIG MOVES (focus, focus, focus) 1. Change the culture

2. Modernize the organizational structure

3. Streamline permitting

4. Fast track strategic projects

Regulatory Barriers to Job Growth

objective #1 -change the culture

Change the climate of bureaucracy from one of obstruction to one focused on achieving positive results.

The agencies need to foster a culture of partnership with applicants to drive job growth and economic development in our state.

action

• Leadership - resignations and appointments

• Training and education of all employees

• Measurement and incentives

Regulatory Barriers to Job Growth

objective #2 - modernize the organizational structure

Change the structure of bureaucracy from one of regulatory mistrust, competition, duplication, and conflict to one of cooperation, coordination and efficiency.

action

• Detailed in following sections

Regulatory Barriers to Job Growth

objective #3 - streamline permitting

Change permitting in Florida such that it recognizes job creation and economic development as quality of life issues to be promoted and protected with the same dedication as we protect other aspects of life in Florida.

action

• Create working group/benchmarking reporting to Governor (or designee)

• Instill Fair, Fast, Final, Fiscally responsible permitting

~ Single application, common among state and local agencies, Coordinated IT system

~ Clear requirements up front, enforced time limits ~ No public entities challenging/suing each other

• Decentralize/localize decision making to the district/local level

• Remove statutorily-created barriers . ~ Eliminate DRI process

~ Eliminate transportation concurrency ~ Comprehensive plan amendments

~ Overhaul Chapter 120

Florida in Transition 48

Regulatory Barriers to Job Growth

objective #4- fast track strategic projects

Create regulatory avenues on which targeted "high-value" projects (substantial number of jobs, high wages, targeted industries) can proceed with increased speed and efficiency so as to make Florida excel in the nationwide and worldwide competition for jobs and economic development.

action

• Governor's office coordination of agency policy and messaging

• Ombudsman/coordinate agency reviews for "high value projects"

• Leveraging existing resources/universities and private industry

Community Affairs

big questions

What role, if any, should the State continue to play in the review, analysis, and approval in amending local comprehensive plans?

How can the transactional costs of growth management be lowered thereby promoting economic development?

Are there compelling state interest that should survive any revision to growth management?

Community Affairs

big moves

~Shift the Policy Paradigm from Growth Management to Growth Leadership substantively rework Chapters 163 and 380, F.S. and create a new framework for inducing responsible economic growth rather than stopping it

~Deconstruct the agency

refocus discrete components as part of a newly created, more muscular, State economic development organization

~ Let cities be cities

eliminate State oversight of local comprehensive planning

f .t~

Community Affairs

key point

• When considering the many horror stories charging DCA as a bureaucratic inhibitor to growth, understand that DCA is carrying out the will of the law and its implementing rules (9J5).

~ DCA is not the cause but the effect of the law.

~ "Blowing up" DCA, as the Tallahassee insiders speculate is the focus of the incoming administration/will not solve the problem. The law must be changed.

~ We need to be smarter. We just won a lO-year war on Hometown Democracy (aka Amendment 4). Itchy trigger policy could have significant consequences.

Environmental Protection

fi rst priority

The greatest need right now that will produce the fastest results is to change the culture and leadership in the DEP and water management districts.

objective

Create an environment of customer service to help citizens and small businesses succeed while ensuring sound growth.

action

• New dynamic leadership in key management positions -IMMEDIATE

• Instill a solid business management philosophy - ONGOING

Florida in Transition 55

Environmental Protection

objective

Create consistent water policy from the Governor's office through DEP to each WMD.

issue

Inconsistencies and contradictions exist within the same regulatory program between DEP and WMD's, between the WMD's and between separate office of DEP and separate service offices of WMD's.

action

Refocus DEP and WMDs on core missions

Environmental Protection

objective

Streamline and simplify permitting process to provide protection to Florida 's natural resources while providing predictable and timely process for businesses.

issue

Cumbersome and duplicative regulatory processes inhibits sound growth.

action

Elim i nate duplication

~ Preempt duplicate local government regulations on wetlands and stormwater

~ All ERP permitting done through WMDs

• Create thresholds to exempt smaller projects with minimal impacts

Today

'Desirable Pature

Pi pilrl<p81ll1¥8 01 fAirlin Copn!): III th';J.8QI 202(), based, on S\lsta1Mble 'islon

Undesirable FUMe

Flonda In Transition 57

Environmental Protection

objective

Eliminate unnecessary additive state regulation duplicative to federal regulation.

issue

Federal regulation is more extensive than it was 20-30 years ago when additive state regulation was created.

action

• Review all federally mandated and delegated programs for unnecessary additive state regulation such as secondary water standard and some minor air permits.

• Eliminate duplication and inefficiencies in back office operation at WMD and DEP. -7 FDEP - 3}500 FTE + 1}100 Other Pers, Svcs.

-7 WMDs - 3}500 FTE + 400 estimated Outsourcing

-7 Substantial overhead reductions (25% - 33%) by combining the administrative} financial & other "back office" operations of these two State Departments

Flonda in Transition 58

E nvi ron menta I Protection

objective

Stop Federal' encroachment and unfunded mandates

issue

Federal policy and rules "over-regulate" Florida beyond a reasonable need, making regulatory process more cumbersome and costly than competitive States (eg Water Policy, Numeric Nutrient Criteria)

action

• Strong Leadership from Governor

-7 Engage Congressional delegation in solutions

-7 Solidify partnerships among effected parties

• Implement Statewide Messaging of Issue -7 Help public understand the issues

Florida in Transition 59

Environmental Regulation

Land Acquisition and Management

objective

Create functional landscapes

• Invest in Florida's Future

• Water Supply

• Water Quality

• Wildlife Habitat

• Recreation

• Tourism

Environmental Protection

objective

Reduce Government Personnel and Cost by creating uniform state-wide land acquisition criteria

action

• Expand Private Concessions -7 Generate Fees to Buy La nd

-7 Reduce Management Cost

• Expand State Mitigation Banking to Raise Acquisition Funds

• Share Title

-7 Gain Expertise and Management

• Introduce Voluntary Visitor Fee

Environmental Regulation

objective

Create jobs and revenues with Public

lands

action

• Create incentives to maintain and encourage working landscapes

• Expand private concessions

• Support Eco-Tourism and Florida Forever

• Expand and encourage more creative mitigation banking

Business and Professional Regulation

objective

Redefine the purpose of the agency to a fast and responsive facilitator of business success

issues

The OBPR issues more than one million business and professional licenses} more than 200 distinct license types and regulates 24 professions and multiple industries.

With approximately 1}575 employees and an operating budget of $130 million} almost all of OBPR}s operating costs are paid by the entities it licenses. DBPR contributed over $2B in revenue to the state through the collection of taxes, license fees and fines. Florida statutes distribute the regulatory responsibilities of the agency as follows:

• Division of Information Technology

• Division of Service Operations

• Division of Professions

• Division of Regulation

• Division of Real Estate

• Division of Certified Public Accounting

• Division of Hotels and Restaurants

• Division of Alcoholic Beverages and Tobacco

• Division of Pari-Mutuel Wagering

• Division of FI. Condominiums} Timeshares and Mobile Homes

• Office of the Secretary and Administration

• Florida State Boxing Commission

Florida in Transition 64

Business and Professional Regulation

issues

• The DPBR is charged with protecting the health, safety and welfare of the public through regulation. Through decades of growth, the State has added regulation" process and burden onto business, diverting from its original, well intentioned, purpose.

• One of the greatest challenges with the regulatory environment in Florida is not with the regulation, laws, rules and process but with the culture and attitude within the regulatory bodies. Recreating a positive culture may be the most difficult challenge but the one that, if successful, will yield the most positive results.

• The time it takes to get "pro-forma" approvals through the system is a huge drain on the State's productivity and a depressant to business climate and progress. While improved over more recent years, even the dept's e-commerce technology is behind the curve.

• Many regulations and rules required of licensees and businesses have little useful purpose" other than to collect fees, and should be minimized or repealed.

Florida in Transition 65

Business and Professional Regulation

action - for execution day one (by authority of the governor)

• Put new hires in key leadership roles that share the Governor's mission to create jobs and positive business climate.

• Issue executive direction to all those that serve at the pleasure of the Governor on boards and commissions to identify 60 fees and rules that can be repealed within 60 days.

• Issue the same directive (as above) to agency and division leaders by executive order.

• Issue executive order to the agency outlining service and performance standards requiring measurement of "turn-around" time and linear-instant" service and processing timeframes. Charge DBPR with determining process to ensure all licenses and renewals are issued within 24-hours.

• Refund (via fee waiver) excess license fees to licensees.

• Create, by executive order, the Red Tape Review Group to review existing and proposed requirements and process under authority of the DBPR. Challenge Review Group to identify duplicative regulation and provide recommendations for elimination.

Florida in Transition 66

Business and Professional Regulation

action - for 2011 legislative session

• Eliminate business license requirement for sole proprietors that have a professional license.

• Relocate Real Estate Division and CPA from Orlando and Gainesville respectively to Tallahassee.

• Eliminate license requirements for certain professionals (eg talent agents, auctioneers, athlete agents, others).

• Extend implementation of H B303 (appraisal mgmt) for 36 months and harmonize with Federal Resolution 4173.

• Decriminalize minor offenses.

• Eliminate all requirements for licensing where there are no standards or requirement other than a fee.

• Shift to a Risk Based Frequency and complaint driven inspection program.

• Eliminate mandatory gaming activities that are unprofitable for additional form of gaming.

Florida in Transition 67

Business and Professional Regulation

Recommendations -longer term

• Enact recommendations of the Red Tape Review Group, elimination of duplicative

regulation

• Require all professions should be self sustaining

• Consider functionality of Call Center (outsource)

• ABT enforcement (core mission?)

• Consider outsourcing/privatization of all inspection programs

• Further modernize, simplify and downsize

Florida in Transition 68

Tort Reform & Insurance

Circuit Court Filings over past 10 years

1.200,000

soo.eoo

- .... -------~ - -,- ------ . -

1.{)(1(WOU

('I( [},tJO()

~~4,MII ~w.n'l

---~i:II.;"'-' ._-,-.,-. . ...... -" --- --- -----.--- ...... ~~~.~--.

'.'h'!::'3J:,

~ .. --- ---- -- .,

4'OO.noo

-- - - -..----.-------- - ---------- -- -----_ ...... -' ~- .. 4_ ...... ~_, _

20.0,000

o

99/00 00/01 01/02 02IO, 03/(}4 04/(}5 0'5/06 06/07 07/,08 08/(}9

52% increase

Florida in Transition 70

Tort Reform & Insurance

County Court Filings over past 10 years

4,0)0,00(1

2.'50U.000

2.000.000

1 .seu ,000

1,000,000

_,~.-~-- -"------ -~-.-- - - ~ -- . -...........-- .. - ~: ", .. - ..- - --~--- -- . _ - _.._.....,._ - _ --

s-on.ono

.. -------- ---- - ---- --_._ ... -- "---"-~_~~I',.If.t#<..' .. ,_~,,~._.., .... _

- r"

• J

99!UO HOlm Oll02 U2l0J O~l04 (MIOS 05/06 06/07 07.108 08/09

79% increase

Florida in Transition 71

Tort Reform & Insurance

• According to the Pacific Resea rch I nstitute, Florida ranks 48

• According to the US Chamber's Institute for Legal Reform, Florida ranks 42

• According to the American Tort Reform Association, South Florida has been ranked as a "Judlclal Hellhole" every year since 2003

.; 'R II:!I 1!t<9 ""'1'

"Do you ha:ue anypictu"rr haoks that (f)uld br:lp a child understand tor: rtjom~?"

Florida in Transition 72

Tort Reform & Insurance

BIG IDEAS

• Property Insurance Reform

--7Citizens Property Insurance

Reform

--7 Rati ng Law Reform

--7 Mitigation Credit Reform

--7CAT Fund Reform

• Bad Faith Liability Reform

• Reduced Medically Inflated Expenses

STRUCTURAL REFORM

• Expert witness

• Judicial Nominating Commission

• Rulemaking

• Statute of Limitations

• Court Funding

Tort Reform & Insurance

MEDIUM TERM/SINGLE INDUSTRY • Crashworthiness Reform

• Medicaid Liability Reform

• Hospital litigation Reform

• Regulatory Compliance Reform

• Pharmacy litigation Reform

• Intentional Tortfeasors Reform

• Prescription Drug Reimbursement

• Government Compliance Defense

• Sinkhole

• PIP

• Unintended Lawsuits

• Evidence Based Medical Decision Making Reform

• Nursing Home Litigation

• Actual Damages Standard

• Punitive Damages

• Collateral Source

Florida in Transition 75

Tort Reform & Insurance

LONG TERM

• Community Based Care Limitation Reforms

• Communications with Subsequent Treating Physicians

• Rule 11

• 30 day Notice Presuit for Retailers

• Limitations for municipal contractors

• Reimbursement Determination

• Immunity for Statutory Teaching Hospitals

• Immunity for Emergency Room Health Care Providers

Florida in Transition 76

STUDY

• Loser Pays

• Speedy Trial

• Foreclosure

regulatory reform I key themes

Florida's challenges and strategic emphasis is (should be) different than it was when its current regulatory system was devised

• the "system" has lost touch with strategic purpose

• the regulatory culture is about barriers rather than prog ress

• the regulatory structure is largely fragmented and siloed and oftentimes fails to work towards a common mission

• the regulatory process is oftentimes layered and redundant, with local and federal processes, and at times even works at cross purposes

• meaningful change will require flawless management, sequencing and focus on: purpose, strategy, objectives, leadership, structure and execution (in that order)