Run it like a business. Improve customer service. Fast turnaround times. Those are the guiding concepts in a draft plan to reorganize the Wisconsin Department of Natural Resources (DNR) into a "charter agency." Dated May 9, 2011, the "Organizational Effectiveness Communication Plan" was obtained by the Milwaukee Journal Sentinel in May and has been widely circulated.
"Wisconsin is Open for Business," the draft states, and to this end the DNR will want to make it easier than ever for corporations, companies and individuals to get the permits they need to build and run businesses. All of which, the document claims, will spur job creation in Wisconsin without sacrificing environmental standards.
The point person behind these changes is Cathy Stepp, Gov. Scott Walker's controversial pick as DNR secretary.
Here are Stepp's qualifications: She and her husband, Paul, owned and operated a home construction business in the Racine area for a number of years. Stepp, 47, also served a three-year term, from 1998 to 2001, on the Natural Resources Board, as an appointee of then-Gov. Tommy Thompson. She was then elected to a single term as a state senator, from 2002 to 2006, before returning to her family business.
Stepp's leadership team includes: Deputy Secretary Matt Moroney, previously executive director of the Metropolitan Builders Association of Greater Milwaukee; and executive assistant Scott Gunderson, who spent the last 16 years as a Republican member of the state Assembly. The agency has also tapped a longtime DNR employee, Al Shea, to head its new Office of Business Support and Sustainability.
Here's what Stepp doesn't bring to the job: experience in natural resources management or environmental law (qualifications possessed by many but not all of her predecessors); experience administering a huge, multifaceted agency; or even a college degree.
The state's environmental community views Stepp and these proposed changes with alarm.
"The fundamental problem here is that you have the fox in charge of the chicken coop," says state Rep. Brett Hulsey (D-Madison), a former Sierra Club official. "The Walker campaign received hundreds of thousands of dollars from polluters. Cathy Stepp is the payback for those contributions."
Others are less harsh, but fear the state may be making a big mistake in how it is retooling the DNR's mission.
Fixing 'broken processes'
In preparing this report, multiple attempts were made to interview Stepp over a three-week period; all were unsuccessful. But Stepp has outlined her philosophy in other media reports, internal DNR memos and before the Legislature.
Essentially, she insists her small-business background will help her turn the DNR into a lean, super-efficient agency focused on customer service. She told the Legislature's Joint Finance Committee on April 4 that she would "streamline our system and fix our broken processes...." She also promised to "free up many of our staff members from what I call kind of the chains of their cubicle and being buried under unnecessary paperwork and processes that are not functional to us."
Stepp added: "That's the exciting thing for me, frankly, the opportunity to kind of restructure our workforce, take a look at our human resources which are dwindling, to be sure, and how we prioritize that workload, with the utmost focus always on not just protection or a sustainability of our environment but actual enhancements. And I absolutely know we can do both."
Others are less sure, of Stepp or the pro-business direction the DNR is now rushing to embrace. They point to comments made by Stepp in June 2009 on the conservative blog The Real Debate. There she said Wisconsin businesses are subject to "crushing" rules, enforced by state employees disconnected from the real world.
"For example," Stepp wrote, "people who go to work for the DNR's land, waste and water bureaus tend to be anti-development, anti-transportation, and pro-garter snakes, karner blue butterflies, etc.... This is in their nature; their makeup and DNA. So, since they're unelected bureaucrats who have only their cubicle walls to bounce ideas off of, they tend to come up with some pretty outrageous stuff that those of us in the real world have to contend with."
In tapping someone with such negative feelings about the DNR to be in charge of it, says Hulsey, the governor wants to fundamentally reconfigure the agency until it serves business more than it protects Wisconsin's natural resources. He notes that, according to the Wisconsin Democracy Campaign, manufacturing and distributing interests gave Walker's gubernatorial campaign more than $1.3 million, construction interests another $1.1 million.
Others, including George Meyer, have a more positive view of Stepp. Meyer led the DNR from 1993 to 2001, which overlapped with Stepp's term on the Natural Resources Board (NRB).
"Cathy did a very good job on the NRB," says Meyer, now executive director of the Wisconsin Wildlife Federation, which represents state hunting, fishing and trapping groups. "She was a big supporter of many issues, including conservation education for young people, as well as a number of hunting, fishing and trapping issues."
Meyer and Stepp sometimes disagreed. "She had a strong development and business point of view, but it was not unreasonable," he says. "She is a good person and easy to get along with."
Steve Hiniker, executive director of the conservation group 1,000 Friends of Wisconsin, also has kind words, saying he's been "very pleased with the amount of open access we've had to the DNR and her top staff." Hiniker admits some concerns about the "charter agency" concept, mostly because it has not been defined. But even here he gives Stepp a break, noting that the plan is a work in progress, leaked before it was finished.
"Was this the governor's idea? The DNR's?" Hiniker asks. "I don't know. I'm waiting to find out what a charter agency is. We'll judge that when we hear from them in greater detail."
Denny Caneff of the River Alliance of Wisconsin says he's spoken with many DNR staffers since Stepp took over. Some are fearful of the agency's new direction, believing they would lose their jobs if they were to speak out.
"On the other hand," Caneff admits, "many DNR people tell me that what's refreshing about the new leadership is that they make decisions, they communicate those decisions well, and if you have a concern, they respond to you quickly. They tell me it's a very refreshing change compared to what they had under the Doyle administration."
Jobs at any cost?
On Dec. 30, 2010, when she was still the incoming secretary, Stepp laid out her vision for the DNR in a memo to employees.
"Well-managed, sustainable natural resources and a clean environment are important to Wisconsin and fundamental to a strong economy," she wrote. "The governor has identified areas where he would like to see improvement. Briefly, he expects us to work with you, as a team, to look at the agency's permitting processes to find ways to streamline and minimize review times, and he wants to strengthen this agency's focus on customer service."
Stepp added, "As a former homebuilder, I became aware of Wisconsin's regulatory climate and how it affected small business owners.... I strongly believe job creation and environmental protection can be mutually supportive. As a small business owner, I understand the importance of customer-friendly relations."
But who is the "customer?"
Under the DNR reorganization plan, says Caneff, "the 'customer' is the permit requester." He sees a disconnect between Stepp's promises to protect the environment and "the utter absence of commitment to the environment by the Walker administration, that seems to be set on this jobs-at-any-cost campaign."
Ann Sayers, program director for the Wisconsin League of Conservation Voters, shares this concern.
"Our reading [of the charter draft] is that the DNR will be basing employment and retention and pay increases on the number of permits issued," says Sayers. "If you read it over, the whole charter document is implying that the 'customer' they keep referring to is not the people of Wisconsin, but instead it is the polluting special interest.
"I can only assume," Sayers continues, "that this means more permits will be pushed out, and these permits will be much more lenient because, in effect, it's these polluting special interests that will be judging and measuring how well DNR employees are doing."
The DNR's proposed reorganization would also strip away the regional power structure currently in place. Instead, all major decisions will be made by the central DNR office in Madison.
Currently, the DNR is divided into five regions. Each has its own director, and each of the DNR's major divisions (air, land, water, forestry, etc.) has its own regional division head. That person reports to the regional director.
There has been a longstanding debate about the regional-versus-Madison approach, notes Scott Hassett, former DNR secretary in the Doyle administration. Should the authority come in a straight line from Madison? Or is it better to have important decisions, like granting permits, left to regional DNR staffs that live and work in the locales where these decisions/permits will be operational?
"In the past, the more decisions that came down out of Madison, the more resentment there was at the local level," says Hassett, currently on staff at Madison's Lawton & Cates law firm. "A regional structure with regional authority is good. The directors and supervisors, they become the face of the agency. They're local, they're not Madison, and they're very tied to what's happening right there."
Not everyone agrees with that assessment. The current regional model was put in place in the mid-1990s, during George Meyer's stint as secretary, from what had been a Madison-directed authority structure. Hiniker was the city of Milwaukee's environmental policy coordinator at the time, and attended stakeholder meetings in Milwaukee on the issue.
"Every one of us on that stakeholder group said, don't do reorganization. It will lead to inconsistent polices throughout the state," Hiniker remembers.
That stakeholder group included local government officials, business people and environmental and conservation groups. In Hiniker's view, they were right to oppose the regional structure that Meyer eventually put in place.
"I know of businesses in southeastern Wisconsin that have had pollution to clean up," Hiniker says. "They go to the DNR office and lobby for a particular staffer to handle their case, because some [staff] were known to be a lot stricter than others. That's just one office. Multiply that by many offices and five regions, and it's a prescription for chaos. We need consistent enforcement and regulation across the whole state."
Yet what sort of "consistency" will Wisconsin get if regional directors lose their current powers?
Changing the rules
When Stepp appeared before the Legislature's Joint Finance Committee in April, she asked that new phosphorus pollution limits be put off for two years. Approved by the Natural Resources Board in 2010, the rule was set to take effect this year.
It sets water quality standards for waterways, and municipalities and industries can't add phosphorus above levels that would degrade those standards. The DNR estimates that adding new filtration technology will cost municipalities between $300 million and $1.13 billion, and industries between $100 million and $460 million.
Phosphorus washes into waterways as runoff from fertilizers and road salts. Papermaking and other industries discharge large amounts of phosphorus, too. Algae blooms in lakes and rivers are a sign of too much phosphorus.
Not only does the algae stink, it can harm aquatic life, decrease water quality and impede water-based recreation like skiing and boating. The DNR currently lists 172 lakes and streams as officially "impaired" because of phosphorus pollution. (In Dane County, the list includes Lake Koshkonong, the Yahara River and Nine Springs Creek.)
Why hold off on implementing this rule, which was five years in the making? Municipalities around the state, Stepp said, felt these phosphorus limits "could not have come at a worse time." These municipalities were going to have to take out substantial loans to upgrade their water treatment facilities.
Other Midwestern states are considering such phosphorus limits but have not yet implemented them. The two-year delay, Stepp said, would "level the business playing field" for Wisconsin.
State conservation and environmental groups have uniformly opposed Stepp's request to postpone the new phosphorus limits.
"It's a very important water-quality issue, and we clearly don't think there's any justification to delay implementation of those limits," says the Wildlife Federation's Meyer.
While the Legislature has yet to act on the phosphorus rule, on May 24 the Joint Finance Committee voted to repeal a decade-long rule that regulates runoff pollution. It asked the DNR to "re-create" this rule and give a detailed "economic impact analysis" of the new phosphorus rule and new standards for shoreline development.
Who will do that analysis? Cathy Stepp's DNR.
"This is a ruse to claim Wisconsin can't afford to protect its waters," says Lori Grant, river protection coordinator for the River Alliance, "and is the first step toward overturning these rules as well."
Of course, Stepp can't be blamed for the Legislature's actions. But Grant notes that Stepp has gone before the Legislature twice, arguing for a delay in the phosphorus rule. That kind of advocacy troubles Hassett, too.
"Normally, the role of the DNR secretary is to defend what was done," says Hassett. "The phosphorus rules, everybody was on board with it, after intense negotiations. Clearly, this was a huge change in policy for her not to stand up for that rule."
Not business as usual
Environmentalists see the "run it like a business" concept embraced for the DNR by Stepp and Walker as fundamentally wrongheaded.
"They seem to think it's like buying a couch," says Caneff. "The salesman gives you a good deal, fast, and you just load up that couch and drive away -- everyone's happy! But those permits are often very complicated, and need careful and thoughtful consideration. I'm not sure if these people who just walked in the door at the DNR understand all that."
The DNR, notes Hassett, is subject to federal environmental rules, and there are many strings tied to the millions of federal dollars the agency receives. "You can't just move that money around," he says. "It comes with tight restrictions."
Amber Meyer Smith, program director at Clean Wisconsin, says she and other environmentalists are not opposed to the DNR cutting costs, becoming more efficient and assisting businesses. But "everything needs to be done with great transparency, and so far we haven't seen that transparency."
Sayers has a similar concern. "We're getting rid of red tape and we're cutting costs at the DNR," she says. "Fine. But how does that affect our ability to manage our forests? What are the costs to our air and water quality? We don't get to have that discussion because it [the charter document] says it will be issued as an executive order by the governor.
"So public input won't happen, and neither will legislative input. The governor will make all those decisions."
And Cathy Stepp, it appears, will carry out all those decisions, in a most businesslike manner.
A big mis-Stepp on recycling?
During her testimony before the Legislature's Joint Finance Committee on April 4, DNR Secretary Cathy Stepp applauded the good things the state's recycling program has done -- then called for yanking most of the program's funding.
"For 20 years, our businesses have paid a surcharge to fund grants to local communities to institutionalize recycling programs," Stepp told the committee. "At this trying time in our economy, Gov. Walker believes it is now more critical to direct that surcharge back to Wisconsin business."
Stepp said recycling could and would continue, as a for-profit business enterprise. She gave the example of Waukesha County, "where 22 communities have banded together to create a recycling program that can turn a profit without state government grants."
But Stepp's conclusion that Waukesha County made a profit on recycling is hard to justify. According to the county's 2009 annual recycling report, the county had revenue from the sale of recyclables of $794,060 -- and expenses of $7,015,680. Factor out yard waste costs, and Waukesha County still spent $4.8 million on recycling alone, and got back less than $800,000.
That year, the county received a state recycling grant of $1.3 million. Had it made a profit, the county would have had to return all or part of that grant. It did not return any.
In 2010, Waukesha County sold $1.2 million in recyclables, with expenses of $7.4 million ($1.6 million of that for yard wastes). It also received a state grant of $1.3 million.
Stepp's claims of for-profit recycling didn't sway the committee. Even pro-business Republicans voiced support for the recycling program and opposed ending the business surcharge.
According to Sam Weis of Clean Wisconsin, "The recycling funds have not yet been added back into the budget, but several Republicans have indicated they will do so before the final budget passes."
Making the northwoods unsafe for drunk snowmobilers
Shortly after Cathy Stepp began as DNR secretary, Patrick Schmutzer sent her an email. The president of Safe and Sober: Wisconsin Snowmobilers United, Schmutzer introduced his group and its mission to reduce drunk driving by snowmobilers.
"She said she supported anything that made our trails safer," Schmutzer recalls. "She even mentioned that she had children who snowmobiled, and she was for anything that would make them safer. So I thought, okay, we have a safety-oriented person here who gets it."
So Schmutzer was shocked when a month and a half later, in mid-February, Stepp called off the DNR's Snowmobile Accident Reduction Team (SART) north of Highway 29, for the duration of the winter. SART wardens, deployed in the northwoods since the winter of 2005-06, have a reputation for stopping snowmobilers for relatively minor violations. But they've also been credited with helping reduce snowmobile deaths.
Stepp told Fox6News in Green Bay that she had heard complaints about SART from a number of parties, especially northwoods tavern and restaurant owners. She also expressed surprise that most SART staff hours were paid at overtime levels, and that SART costs the agency $125,000 a year.
"I'm charged with being frugal with the money we're given," she said.
Stepp noted that most of the winter's snowmobile deaths were happening south of Highway 29. She was correct at the time, though just barely: There were six deaths north of Highway 29 versus eight to the south. Over the past decade, however, there have been twice as many snowmobiler deaths north of Highway 29, most alcohol and/or drug related. That's not surprising given that many snowmobilers drive from one tavern to another.
"Not everyone's drinking," says Schmutzer, who was badly injured some years back by a snowmobiler who'd been drinking, in a head-on collision between two machines. "But when you've got 50 sleds parked in a tavern parking lot, you don't know who's drinking or not."
Stepp pulled in the reins on SART just before the Cruiserfest in Minocqua, a huge, annual snowmobile festival. As soon as she did, the word went out on snowmobiler websites.
According to DNR Law Enforcement, from Feb. 11 (first day of Cruiserfest) until the snowmobile trails were closed, four snowmobile riders were killed north of Highway 29. The DNR lists alcohol as a factor in three of the deaths; the fourth death is listed as likely alcohol related, though it is pending a final determination.
This leaves Schmutzer feeling that Stepp sacrificed public safety in favor of northwoods business interests. He sent her another email questioning her decision but says, "She's never responded to me, told me why."