Sandy Springs, Georgia: The City That Privatized Nearly Everything (VIDEO)

This post has been corrected.

In 2005, decades after Sandy Springs first attempted annexation, the Republican-dominated Georgia state legislature allowed the affluent city, located adjacent to Atlanta, to break off and become a largely autonomous, self-governing entity.

Scrambling to ready themselves for the division, Sandy Springs effectively privatized the large majority of the municipal services by entering into a public-private partnership with CH2M HILL, a full-service operations company that now controls nearly all of the once-public sector, from road maintenance to cleaning up trash in the park.

"Nobody likes change," Sandy Springs Mayor and former economist Eva Galambos told Reason, a libertarian magazine. "But, if your city is fiscally bankrupt, there may have to be some change."

The city, sixth-largest in the state with a 2010 population of 93,853, wanted to separate itself from what it saw as wasteful government spending in surrounding communities. The city benefits greatly, though, from the number of Fortune 500 companies headquartered there, boasting an extremely high per capita income, with the median family household income, according to a 2008 census estimate, approximated at $129,810, and the average family income $169,815.

Comparatively, the surrounding Fulton County has a median family income of only $58,573. The median national income is $49,777.

Adding to that, only 3.1 percent of families -- 7.9 percent of the entire population -- live below the poverty line in Sandy Springs. The percentage of Fulton County families living in poverty, in comparison, is nearly four times higher at 11.5 percent. Without needing to provide to as many poverty-stricken families, who typically use more public services, Sandy Springs can more easily keep taxes at a lower, sustainable level.

Not all of Sandy Spring's public services have been privatized, however. Public safety continues to be handled by government police officers and firefighters, and the Fulton County School System still operates public schools within the city, something not noted in the below video by Reason magazine. Mayor Galambos also notes the city "made a clear decision" to not hand out "defined benefits" of any sort to police officers and firefighters, in order to keep taxes low and avoid future obligations.

In light of municipal budget crises wreaking havoc across the country, the fiscally-conservative Sandy Springs government is proud of their radical decision, which they say has left them with no long-term liabilities. The $25 million they paid to CH2M HILL for one year's work, Reason argues, is less than half what they would pay in a typical, government-run scenario.

Since 2005, four surrounding Georgia cities have adopted the model.

CORRECTION: A previous version of this post said Sandy Springs, GA was located 100 miles outside Atlanta. The two cities are adjacent.

Watch Reason Magazine's video on Sandy Springs' privatization:

Comments

[G Katz]

04:00 PM on 04/25/2011

Some of the assertions and conclusions in these comments are so far off base as to be ridiculous. Property taxes did not change when Sandy Springs incorporated, and Sandy Springs receives only 13% of those taxes. For the rest, 54% still goes to support Fulton County Schools and another 32% goes to Fulton County in general. The remaining .8 percent goes to the state.

For years Sandy Springs residents sent all their money to Fulton County while their problems with infrastructure were ignored. They couldn't even get Fulton County to synchronize their traffic lights! Now they at least have the money they need to provide adequate roads that connect with other counties, parks for people to enjoy, and police presence when it is needed.

If you want to debate the merits of privatization of services, that's one thing; but to villainize a community that takes control of its own destiny while still contributing to the county and state is quite unfair. http://www.sandyspringsga.org/City-Departments/Finance/Tax-Dollar

[ScottV]

04:38 PM on 04/25/2011

Your sure did your reading the same article as the rest of us??? "villainized" didn't see that in the article.

[G Katz]

04:48 PM on 04/25/2011

My comment specifically addressed the other "comments" that have strayed from discussing privatization to accusing the city of Sandy Springs of not supporting the Fulton County school system, of being racially motivated, and of attempting to isolate itself from other communities, all of which are incorrect and have nothing to do with privatization.

[strawberrysgirl]

03:22 PM on 04/25/2011

I'm an Atlanta native and congratulations, that correction at the bottom there is the funniest thing I've read in a while. Seriously? Couldn't be bothered to look up a map or anything to verify Sandy Springs' location? Wow...even if, and especially if, you're non-native, it does behoove you to at least try to get a feel for location. That goes double for this article, in which Sandy Springs' affluence is compared to the rest of Fulton County (it's the one that kind of looks like a dragon, if you decide to look up a map of my state's counties; the head is where the rich people live).

[lageorgia]

03:04 PM on 04/25/2011

I just moved here to Sandy Springs from Virginia Highlands (downtown Atlanta area). What the article does not cover is that it is far more expensive here once we pay for all private garbage collections etc. Also lily white is an understatement. It is still Fulton county, but a very different Fulton county from downtown. Very beautiful, but can not wait to move back downtown to a much more diverse environment. It is easy to privatize everything when you don't have to pay to support or help "the riff raff". The real reason S.S. incorporated was the ethnic issues. Atlanta is about 95% African American and Sandy Springs, right next door, is only about 1%. The tax base here in S.S. has been removed from downtown and the schools and everything have been separated. I much prefer downtown, anyone want to buy a 6500 square ft contemporary here in lala land?

[itpduder]

03:49 PM on 04/25/2011

I live in the city of Atlanta and have for nearly 20 years. Atlanta is NOT 95% black. It is about 55% black. Sandy Springs is 77% white and 12% black (the black percentage roughly matches the national average).

Get your facts straight next time. You put out some serious disinformation with that idiotic statement.

[StopMakingSense2]

02:43 PM on 04/25/2011

Sure adding the profit motive always makes things cheaper. Those CEO's and shareholders don't expect anything out of it. They always claim to be more efficient which are code words for we will make people work for minimum wage and shift that to us and a good deal more. Businesses will do great in the future as long as a middle class isn't required for their survival. They expect to pay their own employees nothing yet think there will still be a middle class left to buy what they are selling.

[Brian Schlosser]

02:47 PM on 04/25/2011

It won't matter to them, because we'll all be shopping in the company store, as it were, anyway. The middle class has been the bane of the aristocracy for centuries, and they will be pleased as punch to see us go.

[Bronxdude]

01:55 PM on 04/25/2011

No-bid contracts to friends and cronies—the preferred way to spread wealthy amongst Republicans.

[James Marcus]

01:17 PM on 04/25/2011

It helps being a small affluent community. Plus, it kind of sucks for the police and fire depart since they do not have pensions so pretty much they have nothing once they retire.

[MrBlueBoyBlitz]

12:45 PM on 04/25/2011

Looks very interesting, I am liberal and find corporate motives definitely not compatible with human values and lives but....and there is a big but if corporates can be under control of governments (not the other way around as is their want) then perhaps their role can be healthy! its similar to the eastern meditation idea that the mind is a wonderful tool for a human being but if it runs the show (which in most cases it does), then you just have a big mess, the mind wants to run the show, it will do everything it can to run the show, and takes tremendous work to overcome but when it has been properly integrated its suddenly is in its right place, and the human being then really knows it. perhaps corporations are like this, they need to be under the right control then they can be of real service. Just a idea, it's never a black and white thing, liberals and conservatives tend to try to pitch this one size fits all. I think I am relearning my admiration for 'some' conservative values, and perhaps that is the key for us all to move forward.

[bluepond]

11:23 AM on 04/25/2011

Our town has done some similar things. Although it seems to save money because the town has held tax increases to a minimum, everybody is actually paying more. Now we pay separately for garbage, school functions (buses, sports, music, etc.). We pay separate town fees for every conceivable function, and many more permits and licenses are required for the smallest acts. The town must sign long-term contracts with private industry providers of services such as trash, so there go the market forces. Oh, hooray for efficiency and savings.

[ReadMyLipstick1]

11:07 AM on 04/25/2011

Clearly this concept would not likely work in a normal city. With only 7% of the population at the average income earning level, there are virtually no social services needed. However it does remain interesting that with such a simplilfied city government that the ciy can save the money it has by farming out the management chores. Would be interesting to see exactly what was happening to the money. Some rather large "if's" and "what if's" in this picture, seems to me.

[Ed Baker]

12:29 PM on 04/25/2011

Social services can be contracted out as well. The town I live in has below average per capita income. The town has saved millions by contracting out several services. For instance, they once paid a "Cemetery Master" $80k a year to run the cemetery. They paid a total of about $300k a year to operate the cemetery. They contracted out the care of the cemetery for $60k to a private firm - the cemetery looks better than it ever has. They privatized the garbage pick up as well (and we don't pay an extra fee for it). They are now looking at using the same firm that does the cemetery to keep up the parks in town.

[ReadMyLipstick1]

01:12 PM on 04/25/2011

That is outstanding! and very positive for other towns. All cities are having one heck of a time making ends meet (aren't we all ...) and I have read where they are undertaking some very unusual, as well as aggressive methods to counteract this. One city sold it's name to a soft drink entity for three months for a huge amount of money. I gues we've reached the "whatever it takes" level!

[Josephus]

03:16 PM on 06/17/2011

Yes my town did the same re: privatizing the cemetery. Things went well until the company running the cemetery went bankrupt and skipped town. Now the cemetery is a weed patch.

[PennsylvaniaHero]

10:57 AM on 04/25/2011

a complete two-class model. Hey, 1890's here we come!

[benjamin harrison]

02:46 PM on 04/25/2011

don't worry keep your hand out long enough and maybe someone will put something in it..

[PennsylvaniaHero]

03:31 PM on 04/25/2011

Hey pick up a history book pal, it's headed in that direction

[ken607]

07:59 AM on 04/25/2011

whats next putting the poor to death? after all they not job creators, the gull of the poor to be poor. there should be a place for them, cause we all know how lazy they are. how they give absolutely nothing to society, mabey they should be put down for the better good of the rich. for those with thick skulls( republicans) this is SARCASM.

[Somethinuglythiswaycomes]

07:06 AM on 04/25/2011

so if we keep everyone under the poverty line outside the city everything works.we should build shanty villages for the poor to live in, better yet ,letem fend for themselves

[OneNationIndivisible]

05:32 AM on 04/25/2011

Privatization is a Fraud that not only wreaks havoc on Communities in the form of depressed wages, shoddy service, and lack of accountability. Also, studies have proven it ends up costing more over time. Worse still, it serves to create a new "constituency", which is compelled to Lobby politicians in order to become irreplaceable.

[Ed Baker]

12:30 PM on 04/25/2011

It's worked quite well in our town.

[benjamin harrison]

02:47 PM on 04/25/2011

what studies? links please..not dribble..

[Sister777]

02:58 PM on 04/25/2011

Privatization has not worked so well for anyone - Eron, Amtrak to name a few examples of how an UNREGULATED "free market" does no good for anyone except a very few.

[Andman0121]

11:54 PM on 04/24/2011

No pensions for firefighters or policemen? WOW, what a gig! (rolls eyes)

[Kai-HK]

02:21 AM on 04/25/2011

No defined benefits plan but rather a defined contributions plan liek everyone in the real world has. Not the same as having NO pension. Again, another liberal overdramatizing a non-issue. If they do not like it, they can get a job somewhere else...that also does not have a defined benefits plan.

BTW, I have a defined contributions plan...and it rocks. I am making a lot more than I ever would under a defined benefits plan. Do not see what the big deal is.

Kai

[Ed Baker]

12:31 PM on 04/25/2011

Yes, they will have to use their 401k just like private employees now. Oh no.

[Sister777]

03:00 PM on 04/25/2011

Oh no is right, considering that the flaws that allowed Wall St to steal everyone's 401k and IRA savings has not been fixed. It will happen again.

[Genders]

07:31 PM on 04/24/2011

Please gag my with a spoon. "fiscally Conservatives" means bankrupt the republic so the corporations and the rich can rule, always has , always will.

Think for 2 seconds, and you will realize that they have added another profit layer: everything will cost MORE. But the people who buy the politicians, are thrilled.

[Kai-HK]

08:39 PM on 04/24/2011

But compared to other cities they are paying less. Profit motive and a need to stay competitive or be fired ensures that they structure efficient services. What is wrong with that? More importantly, since the companies are private, you have more accountability and can fire them more easily if they are not performing, ensuring that they are responsive to the consumers of their services, in this case the tax payer. Currently public unions and government service workers do not have the same commitment to the consumer of their services not the need to be efficient/competitive since they are not held accountable through market forces and the ability to fire them if they do poorly.

Kai

[Genders]

08:43 PM on 04/24/2011

Didn't you read the article? They save money by not serving those without big money.

[Sister777]

03:01 PM on 04/25/2011

But the markets are unregulated, this means they can and do get away with murder. They can and will bring the world to its knees again economically.

[benjamin harrison]

02:49 PM on 04/25/2011

Genders get a grip..you do know Obama's chief of staff is the ex ceo of jp morgan don't you..He's clearly a dem so where does that leave your argument?

[Genders]

03:59 PM on 04/25/2011

The DLC democrats are fiscal conservative enablers, look it up. Vote for the Kucinich Progressive Caucus folks for all but pres.