Is Central Last Remaining City Run by Private Firm?

March 18, 2011 0 Comments

CENTRAL — When it incorporated five years ago, Sandy Springs, Ga., (pop. 83,000) was the first city in America to completely privatize all city services. It was followed by the cities of Milton, Ga. (pop. 31,000), Johns Creek, Ga. (pop. 70,000), and Chattahoochee Hills, Ga. (pop. 14,000). All of the cities farmed out city services — even in some cases the administration of the entire city government — to a $6 billion private international firm, CH2MHILL. It was a glorious experiment in privatization.

When the City of Central was deciding how to provide city services in late 2007, Mayor Mac Watts visited Sandy Springs and decided to follow the model of the Georgia cities.

The City of Central requested proposals for administering Central’s government. CH2HMILL was the only company that had experience and was the only bidder. It was awarded the master privatization contract for Central at a price that has averaged about $4 million a year.

We strongly supported privatization, but like many citizens of Central, we have developed grave reservations about how privatization has been carried out in Central.

Specific, distinct services should have been privatized, such as road repairs, grass cutting, planning and zoning, permit issuance, and IT.

It was a serious mistake to privatize the administration of the entire city government. Today in Central, a private company is the city government. There have been three direct results:

1) There is zero financial accounting for how the $4 million in taxpayer funds is spent. Zero. No financial reports, no audits, no accountability.

2) There is no transparency. The public has no right to see who subcontracts with CH2MHILL, who is employed by CH2MHILL or its subcontractors, and what deals are made.

3) The City Council has no control — zero — over setting priorities. It cannot tell C2MHILL to spend more on potholes or less on litter control. About 80 percent of the city budget goes to CH2MHILL, and

the Council has no control over it.

This is a most extraordinary and undesirable situation. Without oversight and control, anything is possible, including corruption, kickbacks, and payoffs. We simply don’t know where the money goes.

The contract between the City of Central and CH2MHILL is set to expire June 30, 2011. The Council will have to decide whether to again bid out city services to a single provider, such as CH2MHILL, or divide city services into two or more separate, distinct contracts and allow multiple firms to compete for parts of the city’s business.

Now comes the news that Sandy Springs, Johns Creek, Milton, and Chattahoochee — the models for Central’s privatization plan — have all decided to greatly reduce or completely remove CH2MHILL from their governments. Milton and Chattahoochee have ended CH2MHILL’s contract completely. Johns Creek has slashed CH2MHILL’s budget from $17 million to $5 million. Sandy Springs is breaking up city government into six distinct contracts and forbidden any firm from having more than two contracts.

Their concerns are the same as ours in Central — high costs, lack of transparency, and lack of control by the City Council.

It appears that the City of Central is now the only remaining city in America totally administered by a private firm.

By Woody Jenkins, editor, Central City News