This is where the sovereignty of the people is so important. A country (or in this case, a city) should not be able to enter into a deal which it is unable to b

This is where the sovereignty of the people is so important. A country (or in this case, a city) should not be able to enter into a deal which it is unable to back out from. To actually prematurely terminate a public-private contract would be of course very damaging to the reputation of the city/state/country's reputation, and thus would increase the remuneration private companies expect from running public services due to the additional risk, but would be beneficial to each citizen in the long-term if done with caution.