Wednesday, September 09, 2009

Milton may ditch private firm that manages city

Return to 'more traditional governmental model' is being considered

By Ralph Ellis
The Atlanta Journal-Constitution

When Milton, Johns Creek and Sandy Springs incorporated, officials in the north Fulton towns embraced privatization, contracting with the same Colorado-based company to provide daily services to residents.

But in Milton, the relationship has suffered along with the economy. Tonight, the City Council will decide whether to terminate the contract with CH2M Hill and move toward what Mayor Joe Lockwood calls “a more traditional governmental model.”

“This is all done in the spirit of cost cutting,” Lockwood said Tuesday. “The contract we’ve had has been good to get us up and running. But it’s no surprise that we’d be looking at it as we go forward.”

CH2M Hill provides services such as public works, planning and recreation to Milton’s 15,000 residents. The only city employees are public safety and top administrators.

The company has similar contracts with Sandy Springs and Johns Creek. Johns Creek and CH2M Hill are currently reviewing the contract, said Mayor Mike Bodker. By giving an annual lump sum to the company, the city didn’t know exactly what it was paying for, Bodker has said previously.

“I expect that our contract will continue to be refined,” Bodker said Tuesday. “If that were to eventually mean that pieces or all the contract be put out to bid ... that’s what we’d do.”

Sandy Springs, meanwhile, couldn’t be happier with the firm, said Mayor Eva Galambos. “We are absolutely not thinking of severing our relationship at all,” she said. “We make adjustments, and both sides are learning as we go along.”

A call to the office answering machine of Don Howell, CH2M Hill director of operations for municipal services, was not returned late Tuesday.

Milton has a 2009 budget of about $22.9 million, of which $7.6 million was paid to CH2M Hill. About 40 CH2M Hill employees work for the city, Lockwood said.

Milton, Johns Creek and Sandy Springs formed in recent years largely because of dissatisfaction with the level of services provided by the Fulton County government.

“To get the city up and going, we have no choice but to turn to a third-party provider,” Karen Thurman, a Milton City Council member said in a 2006 Atlanta Journal-Constitution story. “I can’t imagine getting anyone else up to speed.”

Local government offficials often discuss privatization as a way to cut costs, but rarely do it, except on a limited basis. Gwinnett County, for example, has outsourced billing for emergency medical services.

Last month, Cobb County turned over operation of its trash site and composting facility to Advanced Disposal Services of Jacksonville. The county hopes to save $5 million yearly.

Galambos, the Sandy Springs mayor, says the model still works. The city has a cost-of-living clause in its contract with CH2M Hill, which this year meant it pays less than last year for the same service. The firm also worked with the city to move employees between departments as needed.

If Milton terminates the contract, a six-month transition period would take effect. During that period, the city will decide if it wants to contract some services with CH2M Hill in the future, Lockwood said.

Other cities are also pulling back. In south Fulton County, Chattahoochee Hills, a new municipality of about 2,500 people, canceled its contract last spring citing high costs. Johns Creek started staffing its human resources department with city employees.

Bodker, the Johns Creek mayor, said changes in the relationship with CH2M Hill were inevitable.

“We certainly know more about what we’re looking for as far as the scope of our services, as well as the economy has dictated that we make changes,” he said.

Staff writer April Hunt 
contributed to this report

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