The city of Sandy Springs, which drew international attention for privatizing city services in its 2005 founding, is bringing most of those services in-house in a dramatic shift.
The city cited rising costs of service and estimated more than $14 million in savings over five years by taking most government services public. The services may be put out to private bid again in future years.
“The city has pioneered the public-private partnership service delivery model, but, we believe, due to the robust economy and very tight labor market, private sector bidders did not deliver the prices we expected,” said Sandy Springs Mayor Rusty Paul in a press release. “We frequently compare the private sector offerings we receive with the in-house cost of delivering services and have elected in the past to rely on the private sector due to cost, flexibility and innovation.
“In this recompete [of rebidding the contracts], the gap between private sector prices and in-house costs for these services was such we cannot justify the difference,” Paul said.
In a special called meeting May 14, the City Council canceled solicitations for its “General Government Services” private contracts.
As of July 1, the following city departments will be brought in-house: Public Works/TSPLOST, Community Development, IT, Finance, Economic Development, Communications, Facilities and Performing Arts Center Operations.
The Municipal Court and Recreation and Parks department contracts will be ended as well, with those departments coming in-house on Aug. 15.
Remaining privatized are: The Call Center and 911 Services; Public Works Field Services, Fleet Services, City Attorney’s Office and the Municipal Court Solicitor office.
The police and fire departments were already in-house. Besides those departments, the city previously only directly employed 10 administration officials, including City Manager John McDonough.
According to the city, the transition will move approximately 183 positions from contract to city-held positions, bringing the total of city-held positions to 482.
The shift is a major one for the city’s history, identity and national profile.
Back in 2005, the city launched with only two employees and one giant outsourcing contract, partly as an efficiency ideal and partly from necessity, because as Georgia’s first new city approved for incorporation in decades, Sandy Springs had only months to form a government from scratch.
The outsourcing, or “public-private partnership,” was modeled on Weston, Fla., a gated Miami suburb that became a city in 1996. But the Sandy Springs model got national press attention and has had local influence. Most new Georgia cities formed since then have begun with a similar model, though with fewer fully privatized departments. The city’s privatization has been praised by former presidential candidate John Kasich on the campaign trail and criticized in liberal activist Naomi Klein’s bestseller “The Shock Doctrine,” and officials from around the world regularly visit City Hall to hear about the model.
But the model shifted in recent years. The city moved from one contract to many for cost savings. Then rebidding of contracts was placed on hold for government stability during the planning of the new City Springs civic center and other major efforts.
The city also recently went through a major transition with the management of its new Performing Arts Center at City Springs, where a contract with an outside management company floundered.
In the press release, Paul said the city will continue altering its form of government as need be.
“We are not abandoning the P3 [public-private partnership] model and are keeping some private-sector providers for services where the costs make sense,” he said. “We will continue to evaluate P3 options with in-house service delivery and will again ask the private sector to bid on these services when job conditions and other market forces allow us to obtain competitive prices. Meanwhile, we have a fiduciary responsibility to our taxpayers to deliver our services as the lowest cost and most efficient manner possible.”