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Utah County explores Georgia city’s model of privatizing government services

October 22, 2017 GMT

Sandy Springs, Georgia, is a city just north of Atlanta that was just incorporated in 2005. The median household incomes and rate of those living in poverty are nearly identical to that of Utah County, and its population of 105,000 falls right in between the population estimates of Provo and Orem.

One thing Sandy Springs does not have in common with Utah County cities is its form of government. When it was incorporated, those running the city chose a non-traditional way of running the city government, including privatization of most government services.

Other than the fire and police departments, Sandy Springs has only a handful of people who are employed directly by the city. Everyone else works for contractors to perform everything from clearing roads during snowstorms to taking care of the city’s information technology.

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It was this unique form of running a government that prompted three elected officials from Utah County to scope out the inner workings of Sandy Springs government. Utah County Commissioners Bill Lee and Greg Graves and Utah County Assessor Kris Poulson flew to Georgia and met with Sandy Springs Mayor Rusty Paul on Oct. 5 for more than an hour and a half. Commissioner Nathan Ivie had a scheduling conflict and did not attend the meeting.

Paul enthusiastically recited the benefits of Sandy Springs’ form of government to those in attendance, according to a recording obtained by the Daily Herald. Costs are cut nearly every time a contract is rebid, he claimed, something he attributed to the innovation of the free market.

“In a legacy city, in most governments, states, federal — there is no incentive for the employees to innovate, to create, to figure out how to do things better, faster, cheaper,” Paul said.

That was exactly the reason for the trip, Graves said. The commissioners are looking at options for lowering county operating costs to avoid raising taxes, as was proposed during last year’s budget season.

“We just went down there to find options because none of us want to raise taxes,” Graves said. “But that always seems to be government’s answer.”

Paul said he has tremendous respect for career government employees, but that incentive makes all the difference.

“Every day these people walk in, knowing that sometime over the next five years, their job is going to be rebid, and if they want to be able to continue to work here, then first of all, over that next five-year period, they need to have delivered the highest quality service they can deliver,” Paul said during the meeting.

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Paul did say, however, that contracting out services is not a perfect system. Many of the same market forces that affect businesses or legacy cities still affect Sandy Springs, he said.

It was also easier for Sandy Springs because it started from scratch, Paul said.

“You have to figure out if you are really serious about doing it, how you transition,” he said. “Because you have to figure out how to transition, and you have to take into consideration that, once you start this, it’s going to have a real impact on the morale of your current workforce.”

How likely is this to happen in Utah County?

So, how serious are the Utah County commissioners about privatizing government services locally?

According to Lee, the commission has already been looking for ways to cut costs and increase efficiency through aspects of privatization, and this is nothing new.

“That’s my take on the Georgia trip,” he said. “It’s just part of a process of exploring options and seeing what they are doing because it really is a fascinating model they have.

Graves was the most enthusiastic about the idea, and called the Sandy Springs meeting “the best hour and a half I’ve spent as a commissioner.”

“It was fantastic because what we learned was, how and why they did it, some of their growing pains and things that happened,” he said.

But Graves joined commissioners Ivie and Lee in saying that if any aspects of that model were to be implemented, it would have to be a hybrid — integrating some aspects of traditional and some aspects of privatized government.

“I know that just implementing their model and bringing it straight over to this model, is not going to work. I can reject that straight out of hand,” Lee said.

Utah County is currently in budget season, and Graves would like to implement some aspects of privatization for this budget season, to begin Jan. 1 — though he is unsure if that is logistically possible.

“The county is close to privatizing in lots of areas that you could do immediately, like portions of public works, like portions of HR, like portions of IT,” he said.

Ivie expressed some hesitation about implementing the model. He would like to see the issue studied much more thoroughly, and doesn’t anticipate any aspects of the Sandy Springs model being implemented until 2019 at the very earliest.

Lee has been intrigued by the idea of privatizing certain government services since before he was elected as a commissioner. What many people don’t realize, he said, is that the county already contracts many services out, including janitorial services and a lot of road projects.

Though Utah County could not carbon copy the Sandy Springs model, Lee said it’s nice to have a template to look at to see what might be able to work in Utah County.

“Their collaboration and cooperation within their city, within the different department heads, is unique,” he said. “Unique in that they have the ability to work together, because if we don’t work together, they may not use us the next time. It’s a whole different mentality than what we have here.”

Ivie said the idea of doing more for less money appealed to him. But he also had numerous concerns.

“Any time we can save taxpayer dollars, that’s an avenue we would look at, so that’s something that’s appealing to me about it, and why I find it intriguing,” he said.

Sandy Springs and Utah County aren’t necessarily comparable as operating entities, Ivie said. While it may be feasible for Sandy Springs to contract out for snow-removal services, that’s not something that would likely be possible in Utah County, which gets far more snow than Sandy Springs.

Ivie said he would be interested in looking at areas such as building maintenance, or areas that are more similar to Sandy Springs, to see if there are potential cost savings by privatizing in those areas.

“Probably my biggest concern is making sure we are comparing apples to apples when we look at something like that,” he said.

Another concern Ivie expressed is that, for many tasks, there is a valid reason that the government does it in-house. Right now, for instance, he can pick up his phone and call public works or maintenance and they’re right there, he said.

“I want to make sure we don’t lose that capacity by having it go to an outside source,” he said. “So any type of contracts or things like that, I want to make sure we are looking at the fiscal impact, but also at the effectiveness impact.”

Right now, Ivie said, he’s not for or against the idea one way or another, though he’s “cautiously optimistic” that they can find components of privatization that will incorporate well into Utah County’s form of government. That’s why he wants to thoroughly vet the idea, to make sure the commission is not raising taxes in a few years to pay for exorbitant contract prices for services that used to be done in-house.

“To me, this is something that I would personally not be able to support this budget season,” Ivie said. “But as we went forward, I would like to say, ‘OK, here’s where this could make sense in the county for the 2019 budget.’”

Are county employees likely to lose their jobs?

One of the biggest concerns about the possibility of heading towards a more privatized government model? Current government employees losing their jobs.

One of the worst parts of meeting with Sandy Springs, Lee said, is that it has caused a lot of concern with county employees who are worried about job security. He’s already met with members of the Human Resources Department about concerns related to that, he said.

“I’m not looking at ways — I’m not trying to punish people,” Lee said. “That’s not my intent. We are still in the exploratory stage. We are not in a decision-making stage.”

Part of exploring the topic means getting feedback, not just from the outside, but from employees within the county.

“If and when in the exploratory phase, we’ve found areas we want to go further down the road, we would need to bring in the employees and department heads and say, ‘OK, we need a plan in doing something,’” Lee said. “We’re doing this together, not doing it separately, and not in a vindictive way.”

Graves acknowledged that, if the county went that way, many employees might not work directly for the county. But, he said it would make sense for private companies taking over to retain many current employees for their institutional knowledge.

“So in a lot of cases, employees wouldn’t lose jobs, they’d lose a title on their check,” Graves said.

In Graves’ opinion, everyone would win if more departments are privatized.

“They get a competitive wage in the private industry,” he said. “They get to do their job more efficiently and still serve the public. The attitude (Paul) had to all those contractors, he treated them as if they had ownership in the city. I’m here to tell you, the environment in that office, you couldn’t tell that not one of them were Sandy Springs employees directly. They had ownership, they loved where they were.”

There are several departments that Ivie said would not make sense to privatize, he said, including the Attorney’s Office and the Sheriff’s Office, but he’s interested in looking into some departments to see if contracting out would make sense.

“Can we find contracts for building maintenance that are going to function better?” Ivie asked. “Can we find contracts with various entities for road maintenance that are going to be cheaper and better than having it in-house?”

But even then, Ivie said, he would want to isolate particular areas to test if the idea would even work.

“If we have some positions in the county where we have people retiring or something like that, to where we can take that, arbitrarily absorb that position and contract that out, that’s a really easy test avenue to see if this is going to implement and work well with minimal impact on everybody,” he said. “Because then you’ve not fired a bunch of people to go with a new concept that then fails and you have to hire a bunch of people back.”

Lee echoed that idea, suggesting the possibility of privatizing certain jobs as people retire.

For now, Graves said he wants to discuss the issue with department heads, people from the private industry and county residents.

“This isn’t just my county,” he said. “This is all of our county, so we all need to be a part of this process.”

Ivie said his gut instinct is that, if changes are made, it would be a hybrid model.

“It would be to where we start to identify particular elements that could be privatized that would make sense, without greatly altering our form of government,” Ivie said.

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