A number of elected officials seem enamored with the idea that local government can operate and/or own enterprises typically operated by the private sector, and a review of the past decade or so shows their lack of wisdom on this account:
The Times muses that the city being involved in the sod business would save roughly $700,000 a year so the city would have its own sod, as opposed to spending $26 million on advanced technology to deal with the waste that can be converted to sod (mandated by the federal government). But, think again, the Bioset contract was for $2 million a year and there’s no reason to expect the city can do it any more cheaply than that, making for a loss of $1.3 million a year. In other words, not accounting for interest payments, 20-year bonds at that amount times 20 would pay for the waste disposal technology now.
To anybody who has ever studied government and economics, these incidents just go to show yet again that introducing an agent who does not operate to make a profit and has an unlimited ability to coerce money from the citizenry has no incentive to make business decisions that are efficient, in both decisions about buying and selling assets and in their operations. Therefore, government should involve itself in enterprises only when there’s an absolute need for the service; it is incapable of providing an enterprise that in and of itself (that is, not in an ancillary way) economically develops its economy.
If politicians remembered this, there would be no convention center hotel, the Red River Entertainment District wouldn’t have gotten a city loan, the parking garage would have been paid for by the developer, and the CenturyTel Center would be sold to a private concern. None of these are vital city services, but they are here because some politicians forget this truth in the rush to puff their chests out to make themselves seem like bigger fishes in small ponds.