Annual Privatization Report 2013

Georgia Contract Cities Continue to Evolve

Subsection of Annual Privatization Report 2013: Local Government Privatization

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Georgia Contract Cities Continue to Evolve

One of the most exciting developments in local government privatization over the last decade has been the evolution of new contract cities in Georgia, Louisiana, Colorado and elsewhere, which Reason Foundation has covered extensively in the Annual Privatization Report. Contract cities outsource nearly all the typical aspects of public service delivery, while retaining a lean local governing body to oversee procurement, rulemaking and public safety functions. While contract cities flew under the radar in 2012, there were several noteworthy developments for several Georgia contract cities, including the creation a new one that’s different from the others: Peachtree Corners.

Peachtree Corners, Georgia Incorporates

In March 2012 voters held elections for the first city council of the city of Peachtree Corners, Georgia. In May 2012 the newly created city hired Sandy Springs City Manager John McDonough and Johns Creek City Manager John Kachmar as consultants to help the city set up its new government. Their goal was to help the city build from the ground up the revenue projections, procurement processes, communications strategies and other plans necessary to get Peachtree Corners off the ground.1 The elected officials were officially inaugurated on July 1, 2012.

According to the city, it aims to be focused on community development and land-use, rather than being a full-service city. This differentiates Peachtree Corners from places like Sandy Springs that are full-service cities and rely on the private sector for the vast majority of that service delivery. In Peachtree Corners Gwinnett County provides public safety, public works, tax collection and emergency preparedness.2

In January 2013 the city announced it would partner with private companies for the following duties:

CH2M HILL, a global engineering and operations firm, will provide code enforcement, business licensing, arborist and public hearing services. The engineering company Charles Abbott Associates will handle plan reviews and building permits, and inspections. GIS (geospatial information systems) services are set to be handled by IT company Terremark.3

Peachtree Corners is included in this discussion because, although the scale of contracting is smaller than the other Georgia contract cities, the city is nevertheless privatizing the delivery of services widely considered core functions of government.

Brookhaven Joins the Ranks of Contract Cities

In December 2012 a second new contract city named Brookhaven joined the ranks of its peers in Georgia. Brookhaven is now the largest city in DeKalb County and despite humble beginnings in a temporary city hall, things appear to be going smoothly into 2013. Mayor J. Max Davis and the first city councilors worked with members of the public to hire interim city staff and negotiate the private contracts and intergovernmental agreements to ensure continued public service delivery.4 The 49,000-person city’s incorporation was made possible by years of legwork at the local and state level to enable a referendum, which was approved 55 percent to 45 percent.5

Brookhaven’s first budget was lower than projections. According to Mayor Davis, more than a quarter of the city’s $15.7 million budget is earmarked as contingency for future projects, specifically for unanticipated expenses in major city departments. Meanwhile the city is still establishing its revenue base, for example insurance premiums and franchise fees from Georgia Power won’t be realized until 2014.6

Sandy Springs Mayor Eva Galambos Makes History

Sandy Springs Mayor Eva Galambos made history in March 2012 when she exercised the first mayoral veto in city history (the city was incorporated in 2005). The city council voted on March 20, 2012 to require inspections before developers in the city start projects and to add a new employee to the city government. Galambos vetoed arguing it would worsen the perception that Sandy Springs’ permitting process is “cumbersome and not business friendly.” She also described it as “personnel creep” because it did not follow hiring processes outlined in the city charter, and that instead new hires must originate with the city manager. City Councilman Tibby DeJulio voted against the measure on the second vote held on April 3, 2012 to override the veto, but it passed 5–1.7

Federal Lawsuit Jeopardizing Contract City Charters Dismissed

The formation of contract cities over the last decade predictably led to backlash, especially from the communities they were previously located in, over the demographic makeup of the new contract cities (i.e. socio-economic status and ethnic/racial diversity). The Legislative Black Caucus filed a lawsuit on April 11, 2012 against Georgia Governor Nathan Deal arguing the state had created “super-majority white” cities within DeKalb and Fulton counties in violation of the Voting Rights Act. The Georgia Attorney General’s office asked the judge to dismiss the suit, which subsequently happened.

The suit was widely considered a long shot despite its predictability. There had been resistance to allowing contract cities for years until changes in the state legislature allowed enabling legislation to create a legal mechanism for the process. Had this suit been successful, it could have led to the dissolution of Sandy Springs, Dunwoody and several other contract cities created in the last decade.8

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Endnotes

1 Dan Whisenhunt, “City manager provides services to Peachtree Corners,” Reporter Newspapers, May 3, 2012. http://www.reporternewspapers.net/2012/05/03/city-manager-provides-services-to-peachtree-corners/

2 City of Peachtree Corners, Ga. Peachtree Corners ops for public-private partnerships: New city outsources community development services (Peachtree Corners, Georgia, January 2, 2013). http://cityofpeachtreecornersga.com/PC_NEWS_RELEASE_Outsourcing_12-5-12_2_-1.pdf

3 Ibid.

4 April Hunt, “City of Brookhaven open for business,” The Atlanta Journal-Constitution, December 17, 2012. http://www.ajc.com/news/news/local/city-of-brookhaven-open-for-business/nTYKZ/

5 Dan Whisenhunt, “How Brookhaven came to be,” Reporter Newspapers, December 16, 2012. http://www.reporternewspapers.net/2012/12/16/how-brookhaven-came-to-be/

6 Nicole Dow, “Brookhaven’s first budget lower than 2014 projections,” NeighborhoodNewspapers.com, February 13, 2013. http://neighbornewspapers.com/view/full_story/21700325/article-Brookhaven’s-first-budget-lower-than-2014-projections?instance=all

7 Dan Whisenhunt, “Sandy Springs City Council overrules mayor’s veto,” Reporter Newspapers, April 3, 2012. http://www.reporternewspapers.net/2012/04/03/sandy-springs-city-council-overrules-mayors-veto/

8 “Federal judge tosses suit against new suburban cities,” The Associated Press, March 20, 2012. http://www.11alive.com/news/article/234164/40/Federal-judge-tosses-suit-against-new-suburban-cities

Harris Kenny is Policy Analyst





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