What if Hawaii’s government were run by a private company? What if transportation, parks, permitting, and hospitals were all run by entrepreneurs instead of politicians?
It may sound far fetched, but Hawaii may soon see at least one public agency transferred to a private company. Maui’s public hospital system may soon be transferred to Kaiser Permanente, which may save the hospital from financial collapse, potentially saving the healthcare system for thousands of Maui residents.
The Big Island and Kauai may follow suit as well, transferring their public hospitals to a privately run model.
But does the model work? To find out, I visited a town that is almost entirely run by a private company, and I made a documentary about it. In 2005, Sandy Springs transferred almost all of the functions of the city government (with the exception of police and fire) to a single company, which runs the town. That company is in charge of running all the vital functions of government, from parks and permitting to paving the roads.
If you’ve ever called the government in Hawaii, you know that a simple question can quickly turn into a week long game of phone tag with government officials.
But that’s not the case in Sandy Springs. The city has a 24/7 non-automated customer service hotline which fields about 6,000 calls per month, meaning that citizens of the town do not wait for answers when they need them. It also has a state of the art traffic system with cameras and a high tech command center.
Sandy Springs also generates huge surpluses. According to Oliver Porter, creator of the city, “We built a $45 million reserve. And, we have zero long-term debt, and unfunded liabilities.”
The city sets aside 25 percent of revenues into a reserve during each budget planning cycle. The surplus has been reinvested into sidewalks, roads, buildings and other capital improvements projects.
This has lead to a multitude of improvements around the town – and, importantly, improvements that did not have to wait for months or years of bureaucratic decision-making. The city has repaved 147 miles of streets, has completed 874 storm-water projects, and has built 32 miles of new sidewalks.
Accountability is a key element in the success of Sandy Springs. If part of the government performs poorly, the city can fire that company, and bid the contract to another company. In 2011, the city said farewell to the primary company that was managing the vital functions of government, and bid to another company to complete the job, which has saved the city hundreds of thousands of dollars.
The privatization model is clearly working in Sandy Springs, and the citizens of the town are happy with the change and the government accountability that has resulted. “To date, our community has been pleased,” said Sharon Kraun, Communications Director. “If the polls are indicators, our founding mayor – who ran on the public private partnership platform, won two terms in office with overwhelming support.”
After the founding mayor retired, a new mayoral candidate, Rusty Paul, also ran on the commitment to keep Sandy Springs privatized, and won by a landslide.
The model is catching fire, as six surrounding cities have also privatized, with six more on the way. In the meantime, Oliver Porter, a leader in the creation of the public-private city model, will come to Hawaii to be featured at a Grassroot Institute event on Oahu on September 28th and on Maui on September 29th. Click the links for more details about how to sign up for the events!