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Category Archives: Municipal Issues

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LPC Agenda October 27, 2014

Minutes: LPC October 27, 2014


How much privatization is good for cities in this recession-strapped century?  Have any cities found it cost\beneficial or cost-efficient to load up on contracts to perform city services?  A recent article in the New York Times highlights the experiences of two cities: Sandy Springs, GA and Maywood, CA that have taken privatization to high levels.

In economics we teach that “public goods” those that should be provided by government are both 1) non-rival and 2) non-excludable.  Non-rival consumption occurs when one person’s consumption does not detract from another person’s consumption.  Consider a national defense system or a lighthouse.  One additional person using the service does not add to the marginal cost of the defense system and one more ship in the harbor doesn’t detract from the light received by other ships.[i]

The second principle of public goods, non-exclusiveness, occurs when you can’t exclude a consumer from receiving the benefits of the system.  If the country is under attack by foreigners, then you protect all of the citizens; you can’t exclude people from the benefit.  Similarly, it’s difficult, if not impossible to monitor a single car from using the street system in a modern urban city.[ii]  If exclusion is possible, such as charging drivers for using a bridge or a toll road with a GPS transponder, then it is good to use the price system for the benefit provided.

The conclusion is that if goods or services are non-rival and non-exclusive they ought to be produced in the public sector.  Alternatively, if the good or service is rival or excludable then it should be produced by the private sector.  A pizza, therefore, is both rival and excludable.  If you eat one piece, then I can’t eat it (rival).  And if I can separate and charge you a price for your pizza the good is “excludable”.  We need to consider these two qualities with each function that a city may decide to contract the service out.

A wealthy community of 94,000 in Fulton County, Georgia, Sandy Springs incorporated because its voters were generally dissatisfied with the municipal services provided by the County.  In 2005, the first “interim” city manager, Oliver W. Porter did a lot of advance work to contract out most services.  Currently, private vendors provide most of the services in Sandy Springs except for John McDonough, the city manager, and six other city employees (and police and fire too as it turns out later in the article):

“Applying for a business license? Speak to a woman with Severn Trent, a multinational company based in Coventry, England. Want to build a new deck on your house? Chat with an employee of the Collaborative, a consulting firm based in Boston. Need a word with people who oversee trash collection? That would be the URS Corporation, based in San Francisco.”

Porter, a retired AT&T engineer, did a lot of the original spadework and wrote contracts that specified the many tasks and duties for private contractors.  For the first five years the city only used CH2M Hill, an engineering firm based in Englewood, Colorado (and an office in Salt Lake City), “to handle every service it delivered.”   But last year the city “sliced the work into pieces and solicited competitive bids.”

“When the competition was over, the town had spread duties to a handful of corporations and total annual outlays dropped by $7 million. (Representatives of CH2M, which still has a call-center contract, said at the time that they were “deeply disappointed” by the results, but wished the city well, according to a local news report.)”

In the last round of bidding, Sandy Springs began awarding second and third place bidders in case the primary contractor underperforms.

On the negative side, some complain that the new city is a “white-flight suburb that has essentially seceded from Fulton County”.  “Will this rich enclave become a gated community walling itself off from areas that are economically distressed?” worries Evan McKenzie, author of “Privatopia: Homeowner Associations and the Rise of Residential Private Government”.

To learn more click on the Times article or check out Oliver Porter’s book:  “Creating the New City of Sandy Springs”


[i] Economics of the Public Sector, Joseph E. Stiglitz, 2000, p. 128.

[ii] Public Finance, Harvey Rosen and Ted Gayer, 2010, p. 55.

Revenue and Taxation Interim Committee:

Of most interest to Utah cities is the discussion over transportation funding.  Provo Mayor John Curtis presented for discussion purposes a proposal to allow retiring city-issued road bond levies to be converted into a dedicated property tax levy for road maintenance.  Discussion evolved from this particular proposal into a broader discussion of transportation funding – including gas tax and sales tax increases.  The committee proposed meeting next month with the Transportation Interim Committee in a joint committee meeting to focus in more detail on transportation funding issues.

Political Subdivisions Interim Committee

This committee held a broader discussion on the issue of government competition with private enterprise.  Representative Curt Webb, Committee Chair stated that his concern was to generally discuss the issue and no action would be taken.  Representatives of Higher Education, Public Education and local government were asked to comment.  Much of the discussion centered on efforts to privatize services.  Roger Tew of the ULCT and Adam Troup of UAC spoke for local government.  Roger pointed out many cities had undertaken serious privatization efforts and also noted that First and Second Class cities had complied with the competitive inventory legislation passed in 2008.  He also emphasized that any type of bright-line test for what are appropriate governmental activities is highly problematic.  He also emphasized that these policy decisions go to core of why cities and towns are governed by their own local decisions which may well differ between communities.  The committee indicated that they may hold further hearings on the future but do not plan any particular legislation.

Transportation Interim Committee

The Transportation Interim committee discussed the Unified Transportation Bill, the recent federal transportation appropriation legislation (MAP 21), and corridor preservation.  Leaders of Utah’s Metropolitan Planning Organizations (MPOs; Andrew Gruber of Wasatch Front Regional Council and Andrew Jackson of Mountainland Association of Governments) testified to the committee about the financial demands for Utah’s transportation infrastructure, how the MPOs bring local leaders together to draft comprehensive transportation plans on a 4 year basis, and distributed the current Unified Transportation Plan to the committee.  They pledged that Unified Transportation Plan would strengthen the economy, benefit the entire state Utah, maximize scarce resources, and demonstrate good stewardship over the land, money, and resources involved in the transportation system.  Afterwards, Linda Hull of the Utah Department of Transportation briefed the committee about MAP-21 and its impact in Utah.  The four-fold purpose of MAP-21 is to provide funding, consolidate programs, become performance based, and accelerate project delivery.  Utah will receive $312 million in Fiscal Year 2012 and 2013 and $314 in Fiscal Year 2014.  The bill also extended transportation-related taxes and fees through 2016.  Finally, the committee reviewed Representative Brad Last’s proposal on corridor preservation options.  Currently, if a city or town is located in a county that also is home to a metropolitan planning organization, but the city or town does not belong to the MPO, then that city or town cannot use corridor preservation fund money to set aside future transportation corridors.  Currently, only the cities and towns that belong to the MPO can access the corridor preservation fund.  Representative Last’s proposal would allow such cities and towns outside the MPO to use fund money for corridor preservation and utilize such resources for planning.  The committee unanimously adopted the proposal as a committee bill and expect continued support from MPOs and quick passage during the 2013 session.


Fireworks Restrictions by Local Communities

KUTV Story on Firework Restrictions

More than 40 mayors, council members, and fire marshals from Duchesne to Logan and Eagle Mountain to Layton met with Governor Herbert today to discuss fireworks use and the potential fire danger in Utah.   The leaders and Governor also held a joint news conference.

Governor Herbert announced that he has banned fireworks in all unincorporated areas of Utah.  He then called on cities and towns to appropriately regulate firework use in their communities.  He declared that he trusted local government leaders to balance allowing the use of fireworks in safe areas and banning the use fireworks in more hazardous areas.  He suggested that cities could restrict fireworks to a particular park or parking lot within city limits but must keep an area available for fireworks use.  Otherwise, he warned, if people don’t have a legal outlet to discharge fireworks, then they would discharge anywhere.  Finally, he called on Utahns to exercise common sense when using fireworks.

On behalf of local governments, ULCT 1st Vice President and Salt Lake City Council Member Carlton Christensen then addressed the media.  He explained that cities had the discretion to regulate fireworks in certain hazardous areas and that cities would also designate other areas as safe.  He encouraged residents to check with their cities for individual restrictions.  He also emphasized that cities would have a zero tolerance policy when enforcing firework law and that people who cause fires due to their fireworks or other discharges will be held liable.

After the press conference, Governor Herbert then met with the city officials and took questions.  City officials asked about financial resources for fires, how to publicize both the “safe” areas and restricted areas, and whether cities had the authority to extensively ban fireworks.  He again repeated that cities do not have the legal authority to ban all fireworks use and urged cities to provide a safe spot in the city where people could light their fireworks.  He also repeated that he did not want to dictate to local government how to regulate fireworks.  He urged city leaders to publicize their restrictions, work with the local retailers in their community, and enforce the law.

ULCT is actively monitoring the firework issue and will keep you posted on any new developments.  We strongly recommend that, if your city is adopting a partial or comprehensive ban on firework use, you provide a list of reasons that demonstrate that environmentally hazardous conditions currently exist in your community.   ULCT wants to ensure that local government retains the authority to regulate fireworks and wants the Governor or the Legislature to have evidence that cities and towns acted diligently and judiciously.

Additionally, we strongly recommend that you utilize your city website or social media to publicize the firework restrictions in your community.   Please also forward the restrictions and ordinance to Janet at the State Fire Marshal’s office at

If you have questions or concerns about the state fireworks law or your city’s ability to regulate fireworks, please contact Cameron Diehl
at ULCT at 801-328-1601 or

Click Photo for Video!

With last week’s abbreviated holiday week (thanks to the Tom Turkey) we have few meetings to report on for the week of Nov. 21st.  We did, however, spend the week deep in preparations for eating turkey, watching Utah pretend it was Easter by laying an egg, and honing our skiing skills with some early-season skiing thanks to our wonderful communities of Park City and Alta…thanks Tom, thanks Kate.

We hope all of you had plenty to be thankful for, and spent ample money on Black Friday to keep those sales tax dollars rolling in to your communities.  If, however, you were not willing to get pepper-sprayed at Walmart to get your favorite Christmas item this weekend, don’t beat yourself up too badly fore today is Cyber-Monday, where you can have a pepper-spray free shopping experience (and I am sure all of you will submit your online purchase record and applicable taxes to the Tax Commission this April to ensure that sales tax money keeps flowing).

While last week was pretty quiet, this week will be fairly busy.  We will have a land-use/Property Rights Coalition on Monday, hosting the SL County Conference of Mayors on Tuesday to discuss township/municipal service delivery issues and both the American Legislative Exchange Council (ALEC) and National Conference of State Legislatures (NCSL) will be meeting this week with ALEC in Phoenix and NCSL in Tampa Bay.

We hope this finds you well and please immediately leave this posting and move-on to your Cyber-Monday festivities.  A more detailed and pertinent weekly report will be provided for next week.


Your ULCT Lobby Team

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