Government competition with private providers should always concern taxpayers and utility ratepayers

The Seattle Times reports that the Washington State Auditor has told the city of Lynnwood that further loans from the city’s utility to the city’s municipal golf course are not allowed, because according to the article,

“the golf course can’t afford to pay them back…

…Lynnwood Municipal Golf Course was allowed to borrow $130,000 from the city utility fund in 2008, $550,000 in 2009, $1.4 million in 2010, and nearly $1.3 million in 2011. 

In addition, the golf course has owed $137,485 to the city general fund since “at least 1996,” auditors wrote. The course has not paid interest on the loan.”

As well and of interest, according to the article,

Auditors said the course violated state law banning the gifting of public funds when it gave a discount to the Lynnwood Parks and Recreation Foundation, a private nonprofit, for its annual golf tournament. It also allowed Professional Golfers Association (PGA) and Golf Course Superintendents of America members to play for free; advertised private lessons on the city website; and donated gift certificates.

Municipal code for cities differs in some important ways from PUD statute in Washington, but the impulse that causes government to divert public funds to capitalize ill-conceived  pet projects that compete with private (taxpaying) providers is remarkably similar….it should be cause for concern by taxpayers and utility ratepayers alike.

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