Lincoln News Messenger

Dear Editor:

The News Messenger recently reported on an important issue that should concern Lincoln's taxpayers.  At a recent City Council workshop, City Manager Bill Malinen described his efforts to get the city into the electricity business.  This is a risky move and it’s a critical time for the Council. Often, when city staffs are asked to explore a proposal like this, they quickly become advocates for the change and attempt to build momentum that will pressure the Council to make the change.

The City Council should stop this project before it goes too far. A city takeover of electricity service is bad news for taxpayers.

First, the financial risk the city manager asks the taxpayers of Lincoln to bear is around $40 million.  If the city utility does not meet financial projections, taxpayers are on the hook for this large debt.

Second, if Lincoln gets into the electric business, other government agencies lose – the county, school districts and other districts will no longer receive property tax that would have been collected from the private utility.

Third, taxpayers lose because subsidies and tax exemptions provided the city utility would cost money.  Subsidies for government-owned utilities annually cost California taxpayers more than $1 billion.

And fourth, the city manager proposes that the city take business away from the private sector, simply so the city can try its hand at making a profit.  That is wrong.  Mr. Malinen does not propose to lower electric rates or provide any different level of service – he proposes to simply charge the same rates as PG&E and reap a profit by avoiding the taxes and regulations that apply to the private sector.

We will be keeping a close watch on this issue.  You, the taxpayers of Lincoln, should, too.

Stephen Kroes
Vice President,
California Taxpayers' Association