Wednesday, September 09, 2009

Milton to split with privatization firm

Cutting costs is behind vote to end contract, city officials say

By Ralph Ellis
The Atlanta Journal-Constitution

Cutting costs is behind vote to end contract, city officials say

The Milton City Council voted unanimously Wednesday night to terminate its contract with CH2M Hill, the private company that has managed most city services since Milton incorporated in January 2007.

Mayor Joe Lockwood said the change was caused by the need to cut costs, a thought echoed Wednesday afternoon by Don Howell, CH2M Hill’s director of operations for municipal services.

Howell said Milton terminated the contract because of “pure economics.” He said the company helped the north Fulton city find many cost reductions, but “they did not feel they were within their budget requirements.”

About 40 CH2M Hill employees work in Milton, which has a population of 15,000. The only people on the city payroll are top administrators and public safety workers.

Milton has a $22.9 million annual budget for 2009 and pays CH2M Hill, an international company based in Colorado, about $7.6 million in a lump sum to handle planning, recreation, public works and other day-to-day operations.

The economic downturn hit Milton hard. Revenues are expected to drop from $21.4 million in 2009 to $17.8 million in the 2010.

The vote triggers a 180-day transition period effective Oct. 1.

City officials said they want to adopt a “traditional” form of city government, but don’t rule out contracting with the company to manage some services after April 1.

Howell said CH2M Hill is now talking to Milton officials about continuing to provide public works and IT services to the city.

The council didn’t talk much about the change. Chris Lagerbloom, the city manager, said the contract termination should not be construed as criticism of CH2M Hill.

“We’re working together as partners to move to a different model,” Lagerbloom said.

While some local governments have dabbled in privatization, the north Fulton towns of Milton, Johns Creek and Sandy Springs embraced the idea. All signed contracts with CH2M Hill.

Howell said he thinks Johns Creek and Sandy Springs will keep their contracts with CH2M Hill.

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