When supporters of the proposed city of St. George sought a model for their government, they looked to Sandy Springs, Georgia, a suburb north of Atlanta.
After incorporating in 2005, the city of around 75,000 people outsourced the bulk of its municipal services to a private company, contracting out operations on everything from its parks department to its court system. For its first three years, Sandy Springs had only six full-time employees on the payroll while contractors handled the rest.
If approved by voters Oct. 12, the proposed St. George is expected to follow a similar path. Its proponents have argued the new city could provide services more efficiently through private contractors.
But back in Sandy Springs, the city council has turned its back on outsourcing. In May, council members voted to offer full-time jobs to most of its contracted employees and now resembles a more traditional municipal government, with more than 230 non-public-safety employees.
The move is a dramatic about-face for a city that evangelized the benefits of public-private partnerships to dozens of other potential cities — including St. George.
The decision came down to basic economics.
When Sandy Springs first incorporated, it signed a five-year contract with the private firm CH2M Hill to run the entirety of its municipal operations. The contract came back up for renewal in 2010 — in the thick of the economic downturn. That gave the city leverage in negotiating a cheaper deal.
Less than two weeks remain before balloting begins on whether to create a new city of St. George, and leaders from the proposed municipality a…
With unemployment now at record lows, the private sector is paying more for personnel. That means contracts are more expensive. Sandy Springs decided to bring the services in-house, a move expected to save the city $14.1 million over the next five years.
"We are at a time in history that it does not make economic sense for the city," Sandy Springs Mayor Rusty Paul told the city council in May.
St. George, if approved, would convert a large part of southeastern East Baton Rouge into the parish's fifth municipality, with a population of more than 86,000 people. Its supporters have long pointed to Sandy Springs as an example of how they would structure their government.
Chris Rials, an organizer with the St. George effort, singled out the city in a speech last year as "the most efficient 21st-century governance model for municipalities." A delegation of St. George supporters even visited the city in 2015.
The proposed budget for St. George also cites Sandy Springs in its footnotes as a source for estimating expenditures. It indicates the city would spend $34 million a year and have a surplus of $24 million, based on annual tax revenues of $58 million that largely draw on a 2 percent sales tax already in place.
Two LSU professors disputed those numbers in a report commissioned by an opposition group, claiming organizers overestimated revenues and underestimated expenses, which would ultimately result in a deficit.
Drew Murrell, an attorney and spokesman for the St. George movement, said Sandy Springs' decision to change its government operations doesn't change St. George's own calculus in advocating for a government primarily staffed by private contractors.
Members of the Federation of Greater Baton Rouge Civic Associations on Thursday night grilled the organizers behind the proposed city of St. G…
St. George's proposed budget currently indicates the city would seek contracts for economic development, planning and zoning services, public works, general city administration, communications, IT, the city attorney and portions of the finance department.
However, Murrell said, St. George could hire city employees for some functions if it proved more efficient, adding that they weren't ideologically wedded to the model.
"The idea is to do what's best for the citizens," Murrell said.
He pointed to successes in Central, which voted to incorporate in 2005 and has outsourced almost its entire municipal government to a private contractor.
To be sure, Central and St. George are two very different communities.
Central is more rural and had approximately 25,000 residents when it became its own city. St. George has an assumed population of more than 86,000 people and is home to an affluent tax base and the some of the city-parish's major commercial corridors.
Central's mayor David Barrow said there are "a lot more pluses than minuses" to privatization, adding that he thinks it's "the most efficient way to do business for government."
Barrow said that, with a larger contract, "your unknowns become much bigger." He said it may be difficult to predict the volume of services requested by the population as big as St. George's. That may take some trial-and-error to perfect.
Mike Bodker, the mayor of Johns Creek, Georgia — one of the few remaining municipalities championing the public-private set-up — said that it's important for the model to "evolve over time" to fit the needs of a specific community.
“This is not a one-size-fits-all model. The communities that have used it have adapted it to their conditions,” Sandy Springs Mayor Rusty Paul said.
The August 2016 flood, for example, exposed a flaw in Central's privatized system of government: the lack of personnel and resources available from IBTS, the city contractor at that time, on a round-the-clock basis to respond to disasters.
"The flood of 2016 highlighted a weakness in any contract that is privatized: You're woefully short on employees," said Central's former Mayor Jr. Shelton in 2017. The city later signed a contract with IBTS that beefed up resources for emergency response.
A number of municipalities have also stumbled over issues of transparency with their contractors. In Sandy Springs, CH2M Hill fired the city's public works director without the municpality's input or knowledge.
Transparency was also an issue in Central with an earlier contract. In 2010, Central City News Editor Woody Jenkins filed a public records lawsuit against CH2M Hill, which at that time held the contract to run the city. The lawsuit turned into a yearslong legal battle. Jenkins argued a private company working at the public's behest is required to follow public records law, and he eventually won the lawsuit.
Evan McKenzie, a professor of political science at the University of Illinois at Chicago, said it makes sense to contract out certain city services, but said it's "fundamentally wrong" to argue that privatization will necessarily be beneficial.
“There is no such thing as an automatic efficiency gain by privatizing something,” McKenzie said. “Sometimes it works, sometimes it doesn’t and sometimes it leads to bankruptcy.”
Until the recent hiring began, Sandy Springs had just 17 employees who were not police officers or firefighters. That number has jumped to 237. The city said it will continue to contract out certain duties, like call center operations, legal work, and public works projects.
That's not entirely unusual for municipalities. The East Baton Rouge City-Parish, for example, contracts out dozens of city services, including solid waste collection, janitorial services, aerial mosquito spraying and parking garage operations.
Sandy Springs' Mayor Rusty Paul said the shift to in-house employees might only be temporary. He said the city expects to revisit the change in a year and didn't rule out reverting back to contractors.
Murrell echoed this point, arguing that "nothing will prevent Sandy Springs from going to private contractors."
Others, however, are skeptical that the city can so easily return to its original model now that it has such a significant workforce on its payroll.
“I would’ve preferred to stay with the public-private partnership if we could have, but the numbers were too compelling," said Sandy Springs councilman Tibby DeJulio. "Will we ever be able to undo it? I doubt it.”