Carl DeMaio’s San Diego managed competition proposal is a tad short of my ideal model – but a quantum leap forward from our present predicament. I enthusiastically support his efforts.
Yet it does raise the question – what WOULD be my ideal model, given the constraints of the real world we live in. My proposed model is indeed not a model – it’s a city in Georgia. Sandy Springs did it right.
The key to their remarkable success is that they did it correctly — right from the city’s inception. An unincorporated area with 90,000 people decided to form their own city, and to run it quite differently than surrounding communities. Without existing city labor unions and their beholden politicians, the innovators faced little organized opposition to their groundbreaking effort.
This city has a total of two city employees. That’s right – TWO!
They contract EVERYTHING out. Sometimes they contract with a government agency for such things as police. More often they use private contractors.
The result is quality city services delivered at literally half the cost of surrounding communities. In addition, the city faces no unfunded pension or health care liabilities – disabling debts haunting cities, counties, states and nations around the world. The city has no meddling labor union influence to deal with. And communities around the nation are starting to take notice.
While not as easy to do with existing cities (because of entrenched special interests), many of the Sandy Springs successes can be adopted elsewhere – and are! Meanwhile other unincorporated areas that have filled in with folks are looking to Sandy Springs for their city incorporation model.
Below is a link to an excellent write-up on this amazing success. I won’t include the full write-up – just the link you can go to. And go to it you should.
—
Innovators in Action 2009
Public-Private Partnerships for Local Governments:
The Sandy Springs Model
http://reason.org/news/show/public-private-partnerships-fo-1 or http://tinyurl.com/PrivateCity
Imagine starting a new city of over 90,000 people with only two employees. We did it.
[click here for the fascinating full article]
Comments 6
I will start out people on this blog can pick and choice a piece here and there, but I wanted to point out some issues that just jump out at me. Also, I don’t know whether this is the right way for the city to run, but I do know the information given for the city is either wrong or very misleading.
According to the city’s website it has a lot more then 2 employees and …..
– It has a city manager and the state is responsible for oversight and management of public-private partnershi (yes, lets please give this oversight to the State of California), it has a city clerk, city attorney, and many other department directors, including 5 people to just handle the city’s PR for a population under 90,000 people. This means 1 PR person to less then 18,000 residents.
– The police have four full-time community coordinators for the population.
Here is the city or chart: http://www.sandyspringsga.org/City-Government/Organization-Chart
– Unlike the City of San Diego, this city requires each resident to find their own trash company to hire, not even something the city contracts out and charge residents. Hey John down the street go sign up a trash company.
– Here are some of their benefits for full-time employees:
* Medical, Health Savings Account, Spending Accounts, Dental, Vision, Disability Insurance, Life Insurance, Accidental Death and Dismemberment (AD&D) Insurance, 401(k), Time-Off Benefits, Vacation, Holidays, Personal/Sick Days, Leave of Absence (including Military Leave), Bereavement Days, Tuition Reimbursement, Employee Assistance Plan
– Read about its FY 2011 Budget, because in 2011 the city expects $77m in revenue, with $83m in expenditures, but will need to dip into its reserves by over $5m to balance its budget for 90,000 residents.
(http://www.sandyspringsga.org/getmedia/c3b8148e-bce2-4db8-8e6e-e3e1bc3fdd0b/2011-BudgetPresentation-052510;;.aspx;.html)
– Look at some the taxes for this town: Real/Personal Property Tax, Local Option Sales Tax, Business & Occupational Tax, Franchise Fees, Insurance Premium Tax, Alcoholic Beverage license and Excise tax, Motor Vehicle Tax, Hotel/Motel Tax, Recreation Fees and Impact Fees.
– According to its website they have a permit, which requires city staff approval to build a fence for residents. Is that right or wrong? (http://www.sandyspringsga.org/SandySprings/media/Documents/Community%20Development/Fence-Wall_Agreement_Form.pdf)
– Just image if our cities in the region in 2009 only had 100 properties identified as vacant and 12 blighted houses. How many in the City of National City?
– Check out some of the benefits for the outsourced positions: Eligible employees can obtain stock in the company through their 401(k) plan, payroll deduction (at a 10 percent discount), direct cash purchase, stock option exercising or via incentive bonus. Through our 401(k) plan, the company matches up to 100 percent of the employee’s first 4 percent of salary and invests an additional 2 percent of the employee’s base compensation in company stock.
Then I was checking Wikipedia (http://en.wikipedia.org/wiki/Sandy_Springs,_Georgia) and found these facts from them interesting:
– They said public safety is not outsourced with 145 officers (81,979 total calls in 2009) and adding more officers, plus they have 97 full time firefighters.
– They said the major provider of mass transit is MARTA, which is Atlanta and the city isn’t paying a dime.
– They said according to a 2007 estimate, the median income for a household in the city was $106,240, and the median income for a family was $129,810. The average income for a household was $116,406 and the average income for a family was $169,815.
– It showed for the City of San Diego in 2000 (Wish it had 2007), the median income for a household in the city was $45,733, and the median income for a family was $53,060. The per capita income for the city was $23,609.
– They said Sandy Springs has about 3.1% of families and 7.9% of the population were below the poverty line, including 8.9% of those under age 18 and 1.9% of those ages 65 or over.
– It showed for the City of San Diego in 2000 (again wish they had 2007) that about 10.6% of families and 14.6% of the population were below the poverty line, including 20.0% of those under age 18 and 7.6% of those ages 65 or over.
So what you’re saying it is an slightly wealthy otherwise average southern town where the houses are far apart (no collective garbage, probably few to no school buses either) that requires a permit to build a fence (probably a shed or a pool also, which is very common in small/medium towns) who have the usual tax options and whose outsourced employees enjoy rich benefits. Oh, and in one of the worst recessions in recent history they are facing a 6.02% budget deficit so they have to dip into the reserves (IMAGINE RESERVES!) saved from previous years of boom to balance the budget without raising taxes.
So average/below-average taxes, lavished benefits for (outsourced) employees, minimal deficits in bad years with reserves to cover them, and some selective services not in place probably due to geography or regional common practice. Basically, what everyone on both sides is saying is we’d be INSANE not to do what they are doing.
So the City doesn’t have 2 city employees, it has ~254 city employees? Hmmm… that’s a little misleading.
And the residents have to pick their own trash collection company? Didn’t any of their city leaders take economics and learn about Economy of Scale?
The residents have to deal with their own trash because, I am making an educated guess having seen much of our great nation, the houses are probably far apart. Door-to-door trash service is probably to difficult to administer. I’d also bet they don’t have some of the water administration issues we do because, again educated guess here from experience, they probably get a lot of water on an individual basis from wells. It also might surprise you to know that most of the country has a volunteer fire department, dramatically reducing costs, even in very densely populated places. Everybody has some unique circumstances and some similar circumstances, whether certain jobs count as “city jobs” because at any given time they are outsourced to another public agency or private company is semantics. Overall point is that thanks to outsourcing Sandy Springs is A LOT better off than San Diego is.
Sunshine:
They don’t have a volunteer fire department and have no idea how you came up with that one. You then wow me over guessing and you are guessing that homes are further apart that is why they don’t administer trash service. You just make me scratch my head now.
There could have been a discussion about outsourcing, but since they don’t line item the budget for the public we have no item if their is more or less expenses, then other places.
Guess what, when the city outsources the services to the county and state, like they do with Sandy Springs that isn’t outsourcing to the private sector, but it’s passing the buck to another government entity.
I could go on, but know in the end this “discussion” will go no where and I would rather spend the time watching anything on television, including Barney!
My point about the volunteer FD was that in some places things that are common practice to us (trash pick-up/water dept/fire dept) are rarities elsewhere. I never said Sandy Springs had a vol fd or that SS doesn’t have municipal water (only clarifying anticipating more excruciating non-comprehension), just a comparison to circumstances of why they might not have trash. In terms of density SS, GA is 45.3% less dense population wise than SD, CA, just for perspective.
I wish they did line-item the outsourcing so we could see who they are outsourcing to, why, and if it is a government where the cost/savings (if any or if it is just passing the buck) is. But they don’t.
Overall my thought it is, what is the harm with outsourcing? If union labor is better quality or better price, or some advantageous combination, then it will win overall and the taxpayers will come crawling back to the unions. The clearly better choice isn’t worried about competition, if anything the better worker wants their competition to go out there and prove the difference. The purpose of the City of San Diego is to provide quality services to the taxpayers, not be an employment agency. If unions offer the best quality at the best price they get the job, if not a private contractor does, let’s not keep either from showing us what they can do for us.
Maybe you should turn off the TV and read more, learn to read carefully, and you might have a better time understanding.