Are Georgia-Style Contract Cities Inevitable in Cashed-Strapped CA?

In Gladys Knight style, LA has proved too much for Maywood, California. The small, lower-middle class suburb of LA has decided to lay off nearly all its government employees as part of a bid to eliminate its $450,000 budget deficit and address its insurance and liability issues. However, this is not the first time cities have sought radical alternatives to the traditional role of local government.

Sandy Springs, Georgia was incorporated in 2005, relying on an extensive public-private partnership, a model under which government contracts with private entities to provide services. The city incorporated with only two public employees–outside its state-mandated police and fire departments. Since 2005, several other cities in Georgia have adopted similar models, including Johns Creek and Dunwoody. Under the Sandy Springs public-private partnership, the new city called for private-sector proposals on a package of services, including city planning, parks/recreation, road maintenance, and public works. Ultimately CH2MHill-OMI, a national engineering firm, was selected to provide this bundle of services.

Since its incorporation, the city has enjoyed low taxes and budget surpluses that have helped it weather the budget shortfalls affecting cities nationwide. Moreover, citizens have expressed widespread support for the model due to the increased quality and efficiency of city services. However, the Sandy Springs model does not appear to be under consideration in Maywood, California–but it should be. The city plans on contracting with surrounding governments to provide city services as do many other California cities. Perhaps this approach can save Maywood, but with larger budget problems looming large in California, expanding existing institutions is a short-sighted plan for saving California’s cities.

For more information on local privatization, see Local Government Privatization 101, or Reason Foundation’s Innovators in Action 2009 feature, Public-Private Partnerships for Local Governments: The Sandy Springs Model.