July 29, 2008
Sell City Light - Endow Parks
A consortium has offered to buy Puget Sound Energy (PSE) for $7.4 billion. Determining a price for PSE involved looking at assets and liabilities, ROI (return on investment), cash flow, future sales and profitability among other factors. A similar process would be involved in establishing a sales price for Seattle City Light. It's really a job for the accountants and mergers and acquisitions attorneys but for purposes of this discussion; let's use $3 billion. Let's also assume investment of sale proceeds could earn a return of five to ten percent per year on average or $150 to $300 million.
So what could we do with this money? One possibility, establish a trust fund dedicated to Seattle parks. With such an endowment, no need for the approximately $120 million annual operating cost for parks in the Seattle city budget. No need for the proposed $146 million extension to the property tax funded parks levy. There are other benefits. The utility would be free of city politics. Rate setting and oversight would move from the ill prepared City Council to the professional Washington State Utilities and Transportation Commission. As a private company, City Light would be more efficient and likely offer better service.
Yes, electric rates may raise slightly; private companies have to pay some taxes government owned ones do not, but on balance, a lower city budget, elimination of a property tax and stable funding for a first class parks system make the idea worth considering.
April 30, 2010
Once Again - Sell City Light, Endow Parks
Seattle Parks and Recreation Director, Tim Gallagher, has resigned. According to the April 28, 2010 Seattle Times, Gallagher was frustrated over "his failure to convince the mayor that parks need to be funded in a different way to survive." So far so good but then he went on to say he wanted a ballot measure to help fund operating costs. "Seattle needs to consider a system like Tacoma's", he said, "where parks are run through an independent body that has the power to collect taxes." A parks system is a core function of the city. Voters approved tax increases to fund new park acquisition and surprise, surprise there is not enough money in the core budget to maintain them especially in an economic downturn. The obvious answer to the park's budget shortfall from a bureaucrat is not only a new tax but also a new taxing authority.
I apologize for recycling a post from the past but let's think outside the box. Sell the non-core power business and use the proceeds to endow the parks. Yes, the vested interests would have a cow but we have too many sacred cows in government now. Here's a chance to sacrifice one for the common good. See Sound Politics Archives for more detail.