Sell Seattle City Light – Endow Parks
Posted by Warren Peterson on July 29, 2008
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.