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December 2, 2005

The Real Sandy Springs Effect
Government based on results, accountability could be model for others
By Geoffrey Segal

At 12:01 am on December 1st, a vision took reality for a large group of citizens in Sandy Springs, Georgia. After fighting Fulton County for over 30 years, their dream became a reality and Sandy Springs was officially an incorporated city—the first new city in Georgia in 50 years.

What makes Sandy Springs relatively unique is what the new city looks like today. Rather than create an entire new bureaucracy, they privatized virtually every city function. Moments after taking the oath of office for the first time Mayor Eva Galambos said, "We have harnessed the energy of the private sector to organize the major functions of city government instead of assembling our own bureaucracy. This we have done because we are convinced that the competitive model is what has made America so successful. And we are here to demonstrate that this same competitive model will lead to an efficient and effective local government."

Meanwhile Fulton County officials are faulting a deficit on the Sandy Springs effect. Turns out that Sandy Springs taxpayers had been subsidizing other government functions to the tune of $26 million a year—and receiving sub-par services to boot. The county commission needs to tackle the problem head on—a high cost of services and poor performance—rather than blame their ills on Sandy Springs.

The real effect or impact of Sandy Springs will develop over the next year. Sandy Springs is likely just the first domino to fall. Two other communities, Milton and Riverside, are already in the process of incorporating. Legislation will be introduced this January and likely signed into law this April. A citizen referendum would follow shortly and the new cities would become Georgia’s newest cities on December 1, 2006.

Mike Bodker the chairman of the Northeast Fulton County Study Commission, who is reviewing the feasibility of the new city Riverside suggests that the new city will "use privatization and partnering to use tax dollars more effectively." The commission wants to identify and utilize innovative and competitive solutions, while making their government more responsible, transparent, and accountable to taxpayers.

Other existing communities including nearby Roswell and Alpharetta are also keenly watching developments in Sandy Springs to see if similar efforts would be appropriate for their city operations.

While this is new to the area it is very reminiscent of the city of Lakewood, California and the subsequent "Lakewood Plan." Incorporated 51 years ago, the city of Lakewood used an innovative and cost-effective strategy to contract for city services. The City Council set local policy, performed community planning tasks and set the annual budget. However, the services were provided through a contractual arrangement with private companies and neighboring communities.

Lakewood sprung a wave of incorporation that led to the creation of some three dozen "contract cities" in California. The plan has continues to be emulated in California and throughout the country including Sandy Springs and Weston, Florida—a community of 65,000 in Broward County with a $100-million annual budget and three city employees.

Weston City Manager John Flint quickly recognized the appeal of contracting for services shortly after incorporation. "We’re not going to have any employees. We’re not going to build a city hall, and no one is going to build an empire."

Lakewood and its successors including Weston, and Sandy Springs demonstrate that there is another way to govern. It is a plan that puts results, performance, and outcomes first, rather than focus on process or systems (i.e., public vs. private) to deliver high-quality, low-cost public services.

Only time can tell how successful Sandy Springs will be. Experience suggests that they’ll become a model city for both cost and quality of services. Local conditions also suggest that they’ll be copied time and time again as different communities rally against poor performance and high taxes. Unfortunately, not all residents will likely benefit from the real Sandy Springs effect as Fulton County officials seem poised to continue to fight the power of competition.

Geoffrey F. Segal is the director of government reform at Reason Foundation.


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