Sandy Springs City Council quickly voted May 14 to bring city services in-house rather than continue its landmark use of a public-private partnership. The city says that reversal will be revisited in one year, but questions remain about how city staff members would return to private companies.

“It just didn’t work out this year,” Mayor Rusty Paul said. “We’ll come back to this. I think there’s a lot of benefit in using the private sector.”

Sandy Springs Mayor Rusty Paul.

The city launched in 2005 using the public-private partnership model, with leaders saying it allowed them to quickly begin city operations and, due to its competitive nature, would be more efficient and economical and prevent corruption. Sandy Springs has since been a model for cities using a public-private partnership and has gotten national press attention. The city’s own webpage on the partnership calls it a “trailblazer.”

The city voted May 14 to reverse that, at least for a year, citing estimated cost savings of $14 million over five years. The city will review the costs again in a year and continue to analyze the numbers, giving the city “flexibility to adjust accordingly,” Councilmember Andy Bauman said at the meeting.

“We’re not abandoning this model,” Paul said. “It doesn’t make economic sense. It’s not wise policy to spend $2.7 million a year we don’t have to spend if we can provide the same quality service.”

It remains unclear how exactly the city would transition back to having private contracts for the hundreds of employees it would now employ in-house.

Councilmember Tibby DeJulio, known as the City Council’s unofficial sage of the city’s founding ideals, said he doesn’t know how the city would transition those employees back and said it was not a question that came up during the council’s discussions. When asked how likely he thought it was that the city would go back, he said it would be “difficult,” but that the city couldn’t pass up the chance to save money for taxpayers. “It’ll be difficult to go back, let’s just say that,” he said.

It’s also unclear how many existing employees will leave their companies to work directly for the city.

City spokesperson Sharon Kraun did not respond to questions about those issues. Department heads and City Manager John McDonough were already directly employed and will remain, Kraun said. McDonough said the shift won’t change how the city approaches leadership and management decisions.

DeJulio said that although this does bring many employees in-house, it is in keeping with the Sandy Springs model, he said. “I know there is going to be some criticism of this, but that criticism is not really founded because this is keeping with the effectiveness and the efficiency of what was anticipated of the city of Sandy Springs,” he said.

As of July 1, the following city departments will be brought in-house: Public Works/TSPLOST, Community Development, IT, Finance, Economic Development, Communications, Facilities and Performing Arts Center Operations.

The Municipal Court and Recreation and Parks department contracts will be ended as well, with those departments coming in-house on Aug. 15.

Remaining privatized are: The Call Center and 911 Services; Public Works Field Services, Fleet Services, City Attorney’s Office and the Municipal Court Solicitor office, which add up to over $11 million in contracts.

The police and fire departments were already in-house. Besides those departments, the city previously only directly employed 10 administration officials, including City Manager John McDonough.

According to the city, the transition will move approximately 183 positions from contract to city-held positions, bringing the total of city-held positions to 482.

The shift is a major one for the city’s history, identity and international profile.

Oliver Porter and DeJulio, who both helped create the model when the city was founded, said they are optimistic and hopeful it will work. Others have concerns the meeting where the decision was made was not adequately announced and about losing some of the benefits of outsourcing.

Porter, who drew up the city’s original privatization plan, said he had not heard about the change from city officials. He said he was hopeful the city made the right choice. “I hope for the best. I hope they made a wise decision,” Porter said.

Porter wrote two books about outsourcing government and has been a skeptic of cities that have brought more employees in-house. He has no regrets about starting Sandy Springs with the public-private model.

“I think was a great move. It helped us get started wonderfully,” he said. “It was possibly the best way for us to get off the ground.”
In a 2016 interview, Porter said outsourcing is still the most efficient way to run government, and he is skeptical of other new cities that do more in-house. “The closer they adhere to the [Sandy Springs] model, the better off they are,” he said.

City Councilmember Tibby DeJulio

DeJulio also has sounded previous warnings about no-bid contract extensions or moving toward in-house positions. The city engaged in some such renewals in recent years amid concerns about government stability during such major projects as the City Springs civic center.

In council discussions in 2016 about no-bid contract extensions, DeJulio warned of a “slippery slope” and that the city should “not start bringing those positions in-house.”

But DeJulio is on board with the newly decided shift to mostly in-house government. DeJulio said that he was originally concerned about the proposal, but after analysis believes it is the right choice and one the late founding Mayor Eva Galambos would have made.

“I’ve thought about this and I thought about what Eva and I would have done back in those days,” DeJulio said. “I have no doubt that we would gone ahead and gone into a situation like this because of the savings.”