Generally a good piece, and much better written than I could have done, but I thought I'd spend a few minutes with my off the cuff reactions:
First, it may be a bit idealistic to go completely private i.e., true privatization. Especially at the local level, in an established community. However, Sandy Springs isn't the model of either approach (full private or just contracting things out). They didn't take on any new functions, and they contracted out everything else they are responsible for. Trash collection and disposal remains an unfettered free market. Many other services remain the purview of the county (water and wastewater are two examples). OMI, the contractor, is responsible for basic municipal functions, among other things, road maintenance - there is no real way to fully privatize this...unless we privatize the roads, but we haven't figured out how to do that on a local level. There may be some "questionable" services in the mind of a libertarian; at least under the contractual arrangement they're doing it for much less.
Second, code enforcement and the restrictions on strip clubs and porn shops. For 30 years, Fulton County ignored their own codes and zoning restrictions and approved any application along Sandy Springs' main road. Having been there, things were clearly out of place. A Longhorn steakhouse was bordered by a massage parlor/adult bookstore and a strip club. Next door to the Starbucks, the same rings true. There was a family Mexican restaurant that ultimately went out of business because families wouldn't bring their kids to that part of town (similar development pattern to Longhorn). Unfortunately, the AP articles don't give you as full a flavor as having boots on the ground does.
Sandy Springs is simply enforcing the codes and laws on the books. You and I (my colleague) may not fully agree with their target, and I respect the rights of the 6% and those that didn't vote (they had huge turnout), but this has been a 30 year fight so nothing is a surprise. If they're unhappy, folks can always fight to change the codes. In addition, Fulton County could have changed its business practices at any time, rather they let Sandy Springs languish to the point of citizen revolt. And like my article said, now three (could be four) other cities are pursuing their approach -- the only difference is their biggest is the spending and less on porn shop or code enforcement -- I doubt you'll see similar articles (code enforcement, going after porn shops) once the other communities incorporate.