Tax Revolt Leads to New City in Fulton County, Ga.

Published October 1, 2005

In a move to gain more control over Fulton County tax dollars flowing out of their area, Sandy Springs, Georgia has decided to incorporate and is moving to privatize government services.

By an astounding 94 to 6 percent vote in June, the nearly 88,000 residents of Sandy Springs, an unincorporated area immediately north of Atlanta, approved incorporation. The city is to be formally chartered in December.

Thirty years of complaints about how the county was diverting tax money from Sandy Springs to the southern part of the county had gone unheeded. Even the county chairman admits that. There also were repeated complaints about the seven-member county commission, dominated by the southern part of the county, making land-use decisions against the wishes of Sandy Springs residents and businesses.

Taxes Weren’t Bringing Services

“The heart of the issue is the dollars are not being allocated in a way that serves the needs of the people. It’s stunning and quite irresponsible,” said Fulton County Chairman Karen Handel, who lives in the northern portion of the county but not in Sandy Springs. “Decisions are made off of emotion and politics and not from need.”

In 2004, after repeated tries, Georgia lawmakers passed and the governor signed legislation allowing Sandy Springs to vote to incorporate. The overwhelming vote in favor of incorporation showed how frustrated residents were with Fulton County government, said Tibby DiJulio, chairman of the Sandy Springs finance task force and a candidate for Sandy Springs’ first city council.

“Local services to unincorporated areas have been provided by the county through a special tax district in those areas,” DiJulio said. “They were charging about $50 million for local services in Sandy Springs and giving us about $24 million of services. That wasn’t the worst part of it. We were being overzoned, underrepaired, with stoplights that don’t communicate, and insufficient police.”

Private Services Preferred

Ray Smith III, vice chairman of the Committee for Sandy Springs, which is helping to organize the city government, said he and other organizers plan to contract out as many services as possible, to keep the government operation lean.

Smith said the Sandy Springs committee is discussing services with private contractors and negotiating with the county for “a safety net” of police and fire protection until the first mayor and city council decide whether to contract with private firms, another local government entity, or the county. Those contracts cannot be entered into until after the council is seated in January, and probably would take several months to complete, he said.

“Georgia provides that a city must provide three services, but it doesn’t say what services,” Smith said. “We will probably have police, fire, and another service. I think ultimately we’ll use private entities. We hope we will be a model for other cities to follow.”

One model for Smith, DiJulio, and other Sandy Springs organizers has been Weston, Florida. That city of 65,000 started as a planned development and incorporated in 1996, also because of gripes about soaring taxes and poor services. Weston has a paid city staff of three people, having contracted out virtually all services.

Professionals Working for Free

Sandy Springs has scores of volunteers on 13 task forces working on various aspects of incorporation.

“We have no budgets. It’s all out of our own pockets,” DiJulio said. “We’re blessed in that we have a tremendous pool of talent. We have bright people on all levels. Our task forces are full of professional people who do for us free what they do for a living.”

DiJulio himself is a perfect example. He was named to direct the finance task force because of his professional background, which includes being a certified financial planner and manager of the local office of A.G. Edwards & Sons, a major full-service brokerage firm.

“I have on my task force attorneys, investment bankers, [and] a person who used to be chief financial officer of a major city, and I’m in the investment business,” he said.

DiJulio estimates first-year revenues will be about $66 million, climbing to more than $70 million thereafter.

Running Surplus, Boosting Services

“Fulton County was spending $24 million for our services,” DiJulio said. “We’re looking at running a surplus and increasing services, including additional police officers, more fire protection, synchronized stoplights to reduce traffic congestion, and better roads.”

Revenue sources will include property taxes, business licensing, a local option sales tax, franchise fees, and hotel/motel taxes. The tax base is big, as Sandy Springs is headquarters to United Parcel Service, Cox Communications, Porsche North America, three major hospitals, a major electric utility company, “and an enormous number of office buildings,” DiJulio said.

Handel said she views the incorporation “as an opportunity to break the logjam we have long had in Fulton County.” She said the county board of commissioners has been divided racially and geographically. Atlanta and the rest of the southern part of the county is majority Democrat, with a large black population. North of Atlanta is Republican territory, with a large white population.

Because of the way the county districts are set up, the southern part of the county has been able to hold the majority of members, she said.

Some Problems Remain

“Incorporation won’t solve everything, because we still have inequities in general fund allocations,” Handel said. “Sandy Springs has nearly 90,000 citizens; South Fulton has about 56,000. The county police department spends $13 million in South Fulton, while just over $7 million is spent in Sandy Springs. That is the dynamics of the 4-3 split on the board.”

Handel said the Sandy Springs incorporation will cost the county general fund about $20 million of revenue. That does not concern her, she said, because that is just a small percentage of the $600 million fund.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.