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Sandy Springs Incorporates, Inspires New Wave of 'Private' Cities in Georgia

City opts to contract out nearly all government services

Leonard Gilroy and Steve Stanek
November 1, 2006

Fed up with high taxes and poor service delivery, the nearly 90,000 residents of Sandy Springs in Georgia's Fulton County voted in 2005 to incorporate, making Sandy Springs the first new city in Georgia in 50 years.

The incorporation has gone so well that two new municipalities are about to be created in Fulton County, which includes Atlanta. Residents of John's Creek and Milton voted to incorporate in July. The areas will become cities on December 1.

Incorporation votes in other unincorporated areas of the county are slated for next year.

Services Contracted

What makes Sandy Springs interesting is that instead of creating a new municipal bureaucracy, the city opted to contract out nearly all government services.

City leaders started with a blank slate, enabling them to ask fundamental questions about what role government should play. Every "traditional" service or function was required to prove its worthiness and proper role and place within government, and officials had to decide whether to "make" or "buy" public services.

Ultimately they decided to "buy" most services from the private sector, signing a contract with CH2M-Hill, an international firm that oversees and manages the day-to-day operations of the city.

The $32 million contract was just above half what the city traditionally was charged in taxes by Fulton County. That will save the new city's citizens millions of dollars a year.

Performance Lauded

Mike Bodker, chairman of the Northeast Fulton County Study Commission heading up the effort for John's Creek, said the new city will likely follow Sandy Springs' model and "use privatization and partnering to use tax dollars more effectively."

Bodker said the commission wants to identify and use innovative and competitive solutions while making the government more responsible, transparent, and accountable to taxpayers.

Sandy Springs' first mayor, Eva Galambos, said the city's relationship with CH2M-Hill "has been exemplary. We are thrilled with the way the contractors are performing. The speed with which public works problems are addressed is remarkable.

"All the public works, all the community development, all the administrative stuff, the finance department, everything is done by CH2M-Hill," Galambos said. "The only services the city pays to its own employees are for public safety and the court to handle ordinance violations."

Police, Fire Government-Run

Sandy Springs had been contracting for public safety services from Fulton County since its incorporation last December. In July, Sandy Springs started its own 100-member police department.

The city and county also recently agreed to the sale of three fire stations from the county to the city.

Sandy Springs bought the fire stations for $5,000 each. The county owed money on two of the fire stations, and Sandy Springs agreed to assume the debt. The city is hiring its own fire personnel.

Galambos said the city would have preferred to use private firefighters, but there is no company in the area that provides private fire services.

"This has been more problematic," Galambos said. "We have been struggling with whether to continue with the county for fire and 911 services or make other arrangements.

"We've had arguments with the county about charging us too much and not giving us the proper equipment," Galambos said.

County, City Dealing

Fulton County Chairman Karen Handel, who backed the Sandy Springs incorporation, acknowledged "there is still some tension with the board of commissioners. However, there are four of us [on the seven-member board] who want to move in a productive way."

She pointed to a pending agreement between Sandy Springs and the county to allow the city to lease several county-owned parks in Sandy Springs.

"Some members of the commission believed the county should recoup fair market value for the park land," Handel said. "But there is a big difference between selling property to a private entity and transferring it to another government."

Handel said some county employees have gone to work for Sandy Springs or have taken jobs elsewhere as a result of the reduced need for county-supplied services.

Secondary Provider

"From a county perspective, Fulton County will become a secondary service provider, more like a city-county model of the Northeast," Handel said. "This means our focus will be on countywide services such as courts, jail, public hospital, basic health and human services. We are really getting back to what county government is supposed to be focused on.

"I see this as a natural evolution for a county that started with one urban core [Atlanta] and that has become more and more urban," Handel said. "Unincorporated areas across the country have traditionally been rural, and we've become extraordinarily urban."

Leonard C. Gilroy is a senior policy analyst at the Reason Foundation. An archive of his work is here and Reason's privatization research and commentary is here. Steve Stanek is managing editor of The Heartland Institute's Budget & Tax News.


Leonard Gilroy is Director of Government Reform


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