Monday, November 16, 2015

Sandy Springs: The City That Outsourced Everything

(Mod: There is a lot of discussion lately about where Sierra Madre is going. The usual ways of governing the place have become largely unsustainable, and advocacy for outsourcing such traditional city functions such as safety services and library have gained considerable traction. And yes, there are cities that have successfully outsourced almost everything. The model most often cited being Sandy Springs.)

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Sandy Springs: The City That Outsourced Everything - When Sandy Springs, Ga., became the "city that outsourced everything" in 2005, it did it out of necessity.

Today, the town of about 100,000 residents has great roads, a state of the art traffic system, award-winning parks, and has funded major capital improvements every year without once raising taxes.

Oliver Porter served as the interim city manager for Sandy Springs and spoke about his experience in that role at a Mackinac Center for Public Policy “Issues and Ideas” forum in Lansing on Wednesday.

"I judge [city] success on two factors: efficiency and response to the public," Porter said. "Based on that, we've been a success."

Before Porter got there, the city was a part of Fulton County, paying high taxes for few services. For decades, Sandy Springs had petitioned the Georgia Legislature to allow it to form its own government. In 2005, the state finally allowed it, contingent on a vote of the people.

The residents voted in June 2005, to form their own city and 92 percent approved. But the city had to be up-and-running on Dec. 1 of the same year.

"I don't know what you would do if you had to have public services in six months, but [shopping around with private vendors] is what I did," Porter said.

For a city about the size of Lansing, he bid out 12 main services to groups that often outsourced to smaller vendors. When certain guarantees could not be met, Sandy Springs chose someone else, which is why most of the time the city found it wasn't prudent to use the lowest bid.

In the contracts, the companies providing the services also had to pledge to have a live person answer phone calls and emails 24 hours a day, seven days a week. They also had to commit to respond to a problem within 48 hours.

"The key is writing the contracts well," Porter said. "But there is incentive for the companies because if they screw up, we can use someone else. That doesn't happen in government."

City taxpayers outsource everything with the exception of public safety, which was explored, determined not to be a good option. However, police officers and firefighters are on 401(k), defined contribution retirement plans, not pension programs.

The city owns no buildings — not even city hall — and little equipment, which means it doesn't have to worry about depreciation on property or assets.

"Sandy Springs has no long-term liabilities," Porter said.

Residents are happy, re-electing every incumbent. For the incumbents who ran for re-election, the lowest vote-getter received 84 percent of the tally. And Porter said the morale of city workers is "sky high" because the companies actually care about their ideas to improve; efficiency is the name of the game in the private-sector.

Porter did emphasize that it is essential that a cost-benefit analysis is done with each contract.

In the past few years, five other cities in Georgia have followed the Sandy Springs model. Porter said he thinks existing cities can do the same, but the biggest obstacle is politics because local elected officials a "are not willing to consider alternative models because they were elected under one system and are afraid to stick their necks out, even if another model is more efficient."

However, increasingly burdensome health care and pension obligations have pushed many cities to the brink, and politicians are forced to take a look at what Sandy Springs has done.

"I tell every city official I meet: Your main job is not to supply jobs — it's to serve taxpayers," Porter said.

(Mod: This article comes from a website called Michigan Capital Confidential.com. Michigan being a state where debt ridden cities are more often the rule than the exception. You can view everything in its original setting by clicking here.)

sierramadretattler.blogspot.com

30 comments:

  1. Love the last paragraph!
    What a concept. Serve the taxpayers

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  2. What a concept: Don't waste money & make people responsible. That may not be legal in CA.

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  3. I hope the CC takes the time to read this. What a great city manager!

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  4. I think the choice is do you serve the needs of those paying the taxes, or the city employees? Seems simple, but apparently in Sierra Madre it is not.

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    1. This CC and their predecessors failed to make the simple choice you identify.
      Eventually Elaine Aguilar will run out of taxpayer money and then the House of Cards collapses. It is called Bankruptcy.Then all the City Employees are laid off,take a 50% haircut on their bloated pensions.
      Then we will have no choice but to contract out everything.
      City Employees will suffer the most with this callous Ponzi scheme. Yet I am sure they favor ever increasing taxes- which simple hasten the day this all falls apart..

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  5. "The key is writing the contracts well," Porter said. "But there is incentive for the companies because if they screw up, we can use someone else. That doesn't happen in government."

    True. In Sierra Madre when the local government agency screws up they ask the City Council for more money. Usually to hire a consultant.

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    1. and then not listen to their advice if it doesn't fit what the gov is looking for.

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    2. City Hall usually selects consultants that come to an already determined conclusion.

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    3. at $50,000 a pop.

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  6. This is what will happen here eventually. There are not many options. As was pointed out at last Tuesday's City Council meeting, even if the 10% UUT passes in April it won't be enough to feed the pension pit. The only question now is whether or not we have to have a financial disaster first.

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    1. If Sierra Madre's City Council seriously, and promptly, considers the cost benefits of contracting out the police and possibly also the library, I believe bankruptcy can be avoided and capital improvements done on a pay-as-you-go basis because expenses will decrease so much.

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    2. 8:00, Harabedian has the answer, a Parcel Tax, then a Special Assessment Tax, and then another Tax, and then....

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    3. Dear Capatin Obvious, It should be obvious that pay-as-you-go will not work. $40 million to replace the 7.5 miles of water pipes which can not be delayed any longer. Even if we outsource everything, which we should, the savings will not be enough to cover the infrastructure costs. I wish it would work but wishing won't make it happen.

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    4. Dear 12:30,

      You're making the assumption that everything is sooooo bad that we have to fix it today. We don't.

      Please don't make the assertion (as Council member Joe Mosca once said) that we'll "float a bond" to fix streets. Paying a 30 year bond to fix a street that lasts 10 years is like taking a 30 year mortgage to buy a car.

      If you can't recognize how bad an idea that bond debt is for street repair, I can't help you.

      Yes, I'm the Captain.

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  7. I bet if the city council quit signing the city managers and public works director Friday checks, they would not be very happy. Elaine and Bruce should know that there Friday pay check monies come from the city tax payer. And the taxpayers are not happy with there performance, but the CC has no back bone to get rid of them! What s really going on in this town,?

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    1. Elaine's Performance Review spilled over into two closed-door sessions a few weeks back.Anyone know what the evaluation was?

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    2. You never hear about that.

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    3. I'm sure they love her. Just like a puppet loves its strings.

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  8. There is a relevant article in the Wall Street Journal today -in the Money & Investing section ,front page,below the fold-C1. Houston has the same problem with unfunded pensions.Many other cities too.The familiar downward spiral.

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  9. The question is why not?
    The answer is benefits.

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    Replies
    1. Gotta pay for those Platinum Pensions.

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    2. I guess we do, but can somebody tell me why? The town is falling apart yet the UUT increase goes for increased employee costs? Why should they get more when the place is falling apart? Are we nuts?

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  10. For once a sound idea that has the voters put back in charge.

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  11. The voters are too stupid to be in charge
    ~ Management

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  12. Huh, the one Dept they did'nt outsource is the Police Dept, imagine that, the biggest cost on a yearly basis to us isn't included in your little story, I'll be darned.

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    Replies
    1. Good thing we have the Sheriffs!

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    2. Anybody seen 1:56 lately?

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  13. 1) I know how hard that I worked for my money 2) prior to reading the tattlers story that two libraryans were retiring, I was only paying for two libraryans salaries, now that we have 2 new libraryans, I am paying for 4 libraryans weekly salaries and pensions ( the 2 new libraryans salaries plus the Two x libaryans pensions). So by my math I am paying 4 salaries and only getting two workers. Does not make much sennce to me. I vote to close the library or contract all serviced out, no more pensions!

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  14. The residents of a town need to be in charge of their future and not the public employees and their unions who don't live in the town and don't care if you lose every service in the world so long as they can retire at a very young age with a very large pension.

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