THE leafy, strip-malled suburb of around
100,000 people just north of Atlanta does not look unusual. Its Tuesday morning business—a meeting of its Design Review Board, held in the city-council chamber, which is little more than a large, low room at the back of a warren of anonymous office buildings and also functions as the municipal court—was positively prosaic. What sets Sandy Springs apart from other cities is that it lacks something that most have in abundance: employees.
Apart from its policemen and firemen—which, under GeorgiaΆs constitution, must be public workers—Sandy Springs has only
seven full-time employees: a city clerk, a court clerk, a finance director and four people who work in the city managerΆs office. The city manager himself works for Sandy Springs, but his spokesman—like all the communications staff—works for The Collaborative, a Boston-based public-affairs consultancy. Morgan Falls is a lovely park overlooking the Chattahoochee river; this and the other city parks are maintained by employees of Jacobs, a multinational engineering firm based in Southern California. Jacobs also administers the cityΆs court, in which the independent judges are paid a flat hourly rate. Severn Trent Services, based in Coventry, keeps the cityΆs books. Four other private firms carry out most of the other city functions.
This experiment in
radical outsourcing began back in December 2005, when Sandy Springs went from being merely a part of Fulton County—which also includes most of Atlanta, GeorgiaΆs capital and largest city—to an
incorporated city itself. CH2M Hill, a Colorado-based engineering firm, signed a contract to provide city services, which it did until the middle of 2011. Then Sandy Springs took the experiment further and
solicited competitive bids for different services. It also signed contracts with losing bidders for every winning one. These contracts came with neither pay nor work; they simply provide insurance in case the winning bidder fails to provide good service or raises prices. John McDonough, the city manager, estimated the move will save Sandy Springs
$7m each year for the next five.
Already the city is in rude financial health. Mr McDonough estimates its rainy-day fund at $21m, and boasts that the city spends around one-fifth of its annual budget on capital projects. Its employees receive 401(k)s, by which pension contributions are deducted from pay cheques, rather than the defined-benefit pensions that are crushing, and even driving into bankruptcy, many other American cities. Indeed, Sandy Springs has no long-term liabilities at all, since the whole point of a 401(k) defined-contribution scheme is to avoid them. Unfunded pension liabilities in the rest of the country, by contrast, came to at least $3 trillion.
Its model has proved appealing. Since 2005 several other areas of north Fulton County have incorporated and outsourced some municipal services as well. Some worry that this marks a first step in the secession of the countyΆs rich, mostly white north from its poorer, mostly black south. North Fulton residents, however, long complained of receiving few services for the taxes they paid. Privatisation on this scale may not work everywhere. The north Fulton cities had the advantage of starting from scratch, without entrenched systems and legacy employees—and their pensions—already in place.
Πηγή: the Economist
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