Councilman Ross on Fox News discussing outsourcing to private companies.

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With the economy wreaking havoc on local tax bases, some communities are looking to cut costs by privatizing services.

“We were able to save the community about 3 million dollars,” said Danny Ross, a city councilman in Dunwoody, GA. The Atlanta suburb incorporated on Dec. 1, making it Georgia’s newest city.

Public services, originally provided by DeKalb County, are now outsourced to private contractors.

Dunwoody follows the example of neighboring Sandy Springs, which became Georgia’s 6th largest city when it incorporated in 2006. Sandy Springs hired the private firm CH2M Hill to provide virtually all public services, with the exception of police and fire/rescue.

The company’s large staff of civil engineers and sub-contractors can be shared by multiple cities and used on an as-needed basis.

“Once the service has been provided, they’re no longer part of the city’s payroll,” said Herb Washington, CH2M Hill’s operations director for municipal services. “Labor costs are the bulk of expenses associated with running a municipal government.”

Cities can also save money by sharing service vehicles. CH2M Hill manages a large fleet of unmarked trucks. When technicians finish a project in Sandy Springs, they replace the magnetic city logo on the side of their vehicle with the emblem of the next municipality requesting work.

Georgia is, by no means, alone in the trend toward privatization of municipal services.

Officials in Tupelo, Miss. are considering hiring an outside contractor to run their public works department. Even cities as large as Los Angeles are looking into such arrangements as they struggle to balance budgets in tough economic times.