John O'Leary is a former GOVERNING contributor. He is co-author of "If We Can Put a Man on the Moon: Getting Big Things Done in Government."E-mail: firstname.lastname@example.org
For decades, residents of Sandy Springs, Ga., were unhappy with the poor quality and high costs of services provided by Fulton County. With a population of just 90,000 compared to the county's 900,000, Sandy Springs residents felt slighted by what was considered an unfair redistribution of tax dollars within the county.
"We were being exploited," Eva Galambos, the mayor of Sandy Springs told American City and County. "Sandy Springs was a cash cow for [Fulton County.]"
In 2005, residents got tired of being milked.
After a decades-long campaign, Sandy Springs declared political independence from Fulton County and embarked on their own little "bold experiment." The result was resounding, with 94 percent of Sandy Springers voting for incorporation.
Newly incorporated Sandy Springs immediately embarked on another bold experiment: They contracted for virtually all non-public safety services.
Today, nearly five years later, an expiring contract provides a chance to assess results. According to city officials, operating with an outsourcing model saves Sandy Springs an estimated $20 million per year. Sandy Spring's bold experiment in privatization has been favorably received by citizens and was recently a winner of the Pioneer Institute's Better Government Competition.
The earliest days of Sandy Springs provide a fascinating (and rare) instance of a community having the freedom to create a government on a blank canvas, freed of existing structures. After the 2005 referendum, the long-standing Committee for Sandy Springs convened 14 task forces to figure out how to best provide general municipal services. Ultimately, contracting offered the best option, guaranteeing a quick turnaround to meet pressing service needs.
The bid process, orchestrated by the governor's office, created two buckets, an "administrative" RFP and a "technical" RFP. Though four companies bid on each, the engineering firm CH2M HILL OMI won both bids after showing the city $2.3 million in savings if they went with a single contractor.
Prior to incorporation, a study by the University of Georgia estimated the newly incorporated city of Sandy Springs would need 828 employees. Thanks to privatization, the reality wasn't even close to that. For the past five years, all municipal services except police, fire and 911 have been provided by CH2M Hill OMI. In addition to public safety personnel, the city manager and his staff are also public employees, giving Sandy Springs 271 public employees augmented by 200 contractor positions or 471 in total -- a far cry from the expected 828.
In addition to the cost savings, the contract is built around other unique features that allow the partnership to maintain high-levels of service and push innovation. Though the foray into city management may be C2HM's first, they are a leading global engineering firm and Sandy Springs now has access to a network of experts on various technical needs like wastewater regulations and IT systems management. Unlike most public management systems, the contract allows for flexibility in shifting budget allocations to meet needs and in the management of workers.
The contract is overseen by the city manager who reports to the Council on performance. Because they are freed from the details of overseeing all the inputs, both the city manager and the Council can focus on managing for results.
To avoid the lack of responsiveness that characterized the city's relationship with Fulton County, a critical piece of the contract has been the creation of a 24/7, non-automated customer service hotline. Though 311 systems are growing more common across big cities, for a city of just a 100,000, access to an expensive, customer-driven product like the call center provides tremendous benefit. The call center receives about 6,000 calls a month.
Moreover, because the city's operating budget has come in under approved amounts, Sandy Springs has been able to invest $72 million in capital improvements since incorporation.
With CH2M's contract up at the end of the year, Sandy Spring leaders are looking at their options. They may choose to expand beyond a single contractor, exploring a variety of competitive models to gain further savings. Shifting to a traditional public workforce doesn't appear very likely. For other municipal leaders, the question remains as to whether this wholesale outsourcing can provide some lessons about what might work in their cities.
Jay Kairam provided research for this article.