Municipalization
Encyclopedia
Municipalization is the transfer of corporation
s or other asset
s to municipal ownership. The transfer may be from private ownership (usually by purchase) or from other levels of government. It is the opposite of privatization
and is different from nationalization
.
. The driving reason in most cases was the failure of private providers to sufficiently expand service provision outside wealthy parts of urban areas.
The second wave took place in the early 1990s, when after the end of the communist state
s in eastern Europe state-owned companies in many public service sectors were broken up and transferred to municipal control. This was typical in sectors such as water
, waste management
and public transport
, although not in electricity
and natural gas
.
Such regional companies either remained under municipal control, or were privatized
. Privatization was done variously: by selling them to investors, by giving a concession
or a management
contract. Examples include the water sector in the Czech Republic
, over half of which has been privatized.
s. This generally ends de facto
the county's own home rule, which in most states allows it to act as the municipal service provider in those unincorporated areas. The county is left offering only those services mandated of it by the state constitution
, which are generally only extensions of state government
like court
s and sheriff departments
. As with utilities, the county's assets usually end up being distributed among the cities, though this is less likely if the process is gradual rather than all at once.
One example of municipalization is the Sacramento Municipal Utilities District, or SMUD
, of Sacramento
, California
. In another, larger example, Fulton County, Georgia
, which includes the city of Atlanta
, is currently undergoing full municipalization. For a more complete discussion of this process in the Fulton County context, see the "Politics" section of the Fulton County article.
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
s or other asset
Asset
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
s to municipal ownership. The transfer may be from private ownership (usually by purchase) or from other levels of government. It is the opposite of privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
and is different from nationalization
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
.
Services
There have been two main waves of municipalization in developed countries. The first took place in the late nineteenth and early twentieth century, when municipalities in many developed countries acquired local private providers of a range of public servicesPublic services
Public services is a term usually used to mean services provided by government to its citizens, either directly or by financing private provision of services. The term is associated with a social consensus that certain services should be available to all, regardless of income...
. The driving reason in most cases was the failure of private providers to sufficiently expand service provision outside wealthy parts of urban areas.
The second wave took place in the early 1990s, when after the end of the communist state
Communist state
A communist state is a state with a form of government characterized by single-party rule or dominant-party rule of a communist party and a professed allegiance to a Leninist or Marxist-Leninist communist ideology as the guiding principle of the state...
s in eastern Europe state-owned companies in many public service sectors were broken up and transferred to municipal control. This was typical in sectors such as water
Water
Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...
, waste management
Waste management
Waste management is the collection, transport, processing or disposal,managing and monitoring of waste materials. The term usually relates to materials produced by human activity, and the process is generally undertaken to reduce their effect on health, the environment or aesthetics...
and public transport
Public transport
Public transport is a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, car pooling or hired buses which are not shared by strangers without private arrangement.Public transport modes include buses, trolleybuses, trams...
, although not in electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
.
Such regional companies either remained under municipal control, or were privatized
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
. Privatization was done variously: by selling them to investors, by giving a concession
Concession (contract)
A concession is a business operated under a contract or license associated with a degree of exclusivity in business within a certain geographical area. For example, sports arenas or public parks may have concession stands. Many department stores contain numerous concessions operated by other...
or a management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
contract. Examples include the water sector in the Czech Republic
Czech Republic
The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....
, over half of which has been privatized.
Governments
In the U.S., municipalization often refers to incorporation of an entire county into its municipalities, leaving no unincorporated areaUnincorporated area
In law, an unincorporated area is a region of land that is not a part of any municipality.To "incorporate" in this context means to form a municipal corporation, a city, town, or village with its own government. An unincorporated community is usually not subject to or taxed by a municipal government...
s. This generally ends de facto
De facto
De facto is a Latin expression that means "concerning fact." In law, it often means "in practice but not necessarily ordained by law" or "in practice or actuality, but not officially established." It is commonly used in contrast to de jure when referring to matters of law, governance, or...
the county's own home rule, which in most states allows it to act as the municipal service provider in those unincorporated areas. The county is left offering only those services mandated of it by the state constitution
Constitution
A constitution is a set of fundamental principles or established precedents according to which a state or other organization is governed. These rules together make up, i.e. constitute, what the entity is...
, which are generally only extensions of state government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
like court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
s and sheriff departments
Sheriff
A sheriff is in principle a legal official with responsibility for a county. In practice, the specific combination of legal, political, and ceremonial duties of a sheriff varies greatly from country to country....
. As with utilities, the county's assets usually end up being distributed among the cities, though this is less likely if the process is gradual rather than all at once.
One example of municipalization is the Sacramento Municipal Utilities District, or SMUD
SMUD
The Sacramento Municipal Utility District provides electricity to Sacramento County, California, and a small portion of adjacent Placer County, established under the Municipal Utility District Act...
, of Sacramento
Sacramento, California
Sacramento is the capital city of the U.S. state of California and the county seat of Sacramento County. It is located at the confluence of the Sacramento River and the American River in the northern portion of California's expansive Central Valley. With a population of 466,488 at the 2010 census,...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
. In another, larger example, Fulton County, Georgia
Fulton County, Georgia
Fulton County is a county located in the U.S. state of Georgia. Its county seat is Atlanta, the state capital since 1868 and the principal county of the Atlanta metropolitan area...
, which includes the city of Atlanta
Atlanta, Georgia
Atlanta is the capital and most populous city in the U.S. state of Georgia. According to the 2010 census, Atlanta's population is 420,003. Atlanta is the cultural and economic center of the Atlanta metropolitan area, which is home to 5,268,860 people and is the ninth largest metropolitan area in...
, is currently undergoing full municipalization. For a more complete discussion of this process in the Fulton County context, see the "Politics" section of the Fulton County article.