Government-Run Business: Appropriate Role or Not?

Brad-1by Brad Felmey
The City of Weatherford operates (at least) two distinct businesses, although both are managed together: utilities and property management. Property management in this context refers specifically to 400-500 real estate holdings abutting Lake Weatherford, which are currently owned by city taxpayers and leased to the private sector for both residential and commercial purposes.
Some residents have been asking for a while now why the city council continues to maintain these functions under governmental auspices. Although a few of the vocal opponents of the current system tend to be dismissed out-of-hand by some, the topic nevertheless merited investigation. Should the city (or any governmental tier) be running businesses for profit? After asking questions of both sides, followed by the careful, considered application of rational thought and a healthy dose of the spirit of the U.S. Constitution, the result was one inescapable answer: No.
A good portion of that conclusion is rooted in the political philosophy that governments should have very specific, enumerated roles. Do a few things, and do them well; stay out of the way of people and businesses who have actually made this country work for 230-odd years. Nowhere in that philosophy is found “create a monopoly, enforce it by law, and run the resultant business to make money”. This isn’t about “can”, it’s about “should”. These two terms are not the same thing.
The most compelling argument encountered for keeping the current scenario is that the city makes a profit on utilities and leasing out those lake properties, which reduces the property tax rate. That’s an admirable concept, but by logical extension, should then the city open a couple of convenience stores, a car dealership, perhaps a bank? If running a business and making money for the city is desirable, then why not expand the scope – more is better, right?
Answer: Because running businesses is not a core competency of government. Anything that does not fall under core responsibilities (such as roads and emergency services) should properly reside in the private sector. This is said knowing full well that in this case it would cause a change in the city’s finances. For City of Weatherford residents, no longer operating these businesses would almost certainly mean either an increase in taxes, a decrease in services (such as parks and library hours), or both. This is mentioned so as not to be intellectually dishonest about the resultant effect.
The sale of these assets, properly divested, could provide a significant amount of capital to be used for things like desperately-needed roads and debt retirement – the latter potentially reducing the debt-service portion of the effective property tax rate.
These properties (real and business) are taxpayer-owned, and therefore it is in the taxpayers’ interest for their divestiture to be handled in such a way that the value of these properties is realized. Plain-English translation: a fire sale at rock-bottom or giveaway prices would constitute a breach of stewardship, and should not be countenanced.
The result would be a city with a much clearer focus on the things that it should be doing well, and a reduced opportunity for negative public discourse that distracts from and impedes the proficient dispatch of constitutional governmental responsibilities.
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3 responses

  1. You wrote about the two “businesses” that are managed by the city but only discussed property ~ what about utilities ~ what is your solution?

    1. No my solution was to sell both. I apologize if that wasn’t clear.

  2. “create a monopoly, enforce it by law, and run the resultant business to make money”.

    I love the way the federal government runs the postal service and the VA health system. Can hardly wait until the government owns the banks, hospitals and physicians.

    thanks for a good commentary.

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