How entrepreneurial should local government be?
City Hall is the place where you contest your parking ticket or pay your property tax bill. You may prefer that your local elected officials stay focused on their work and not venture into outside ventures.
However, in these times of tight budgets, and a growing number of people having to pay more for their services, Skepticism regarding the assumption that the private sector manages public resources more efficiently.A creative and entrepreneurial City Hall could be one of the greatest things that could happen for citizens and public servants.
Lancaster, Calif., a city of approximately 160,000 people, is located about 70 miles north-east of Los Angeles. It may be Exhibit A to such an approach.
Lancaster is known for its business-friendly atmosphere. However, Lancaster has also been recognized for its excellent customer service. Median personal income of approximately $21,000It is significantly lower than the national median. The majority of residents work in defense and related industries, including nearby Edwards Air Force Base.
For the past few years, the city was an energy producer. It generated solar power through large panel farm systems in order to save money and increase revenue by selling it off to residents and local businesses.
It is safer and more traditional to rely upon a regulated, private utility. However, Lancaster’s desire for unorthodox activities may be a result of a familiar impulse. According to Jason Caudle, the City Manager of Lancaster, officials in Lancaster have a bit more fire than their counterparts in more wealthy cities.
Caudle said that they are not a community that generates a lot of income. We are not on that list. It makes us live in scarcity. Because the citizens don’t give you the same resources as other communities, you have to be creative and entrepreneurial. It’s not common for every city to think this way. We have a council that is willing to take chances.
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Caudle said that the city’s efforts to produce clean electricity began in 2008, when it installed solar panels on parking lots. It took many years of planning, analysis, and finally, in 2014, the city was registered with the California Public Utilities Commission to become a community option aggregator. This was the first such entity that was operated by a municipality. Lancaster Choice Energy (LCE), went live in May 2015.
LCE power was initially used only in municipal buildings, which saved the city some money. LCE started to sell power to local residents, businesses, and generated revenue for the city. This saved households approximately 3% each year, as opposed to the power provided by the local utility.
Clean-energy is just as important to some Lancaster residents and officials. According to city literature in 2019, the city became one the first zero net energy cities worldwide. This means it procures and produces more energy from renewable sources than is consumed within the city limits.
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The Government Finance Officers Association, which is a national association of professionals from both the state and local levels, wrote about the initiative in a recent article. The GFOA pointed out that Lancaster had a second advantage in that it didn’t have to re-create existing power grids, but could use the Southern California Edison infrastructure.
“Before you get into energy, you won’t realize all the possibilities that are available to your potential. You don’t know what you don’t know.”
Jason Caudle, Lancaster City Manager
Still, Caudle said that the process of creating LCE was difficult for them because they were the first municipality in the country to do so. In fact, Similar attempts were made in other municipalitiesIn some cases, they were abandoned after many years.
They offer consulting services to communities that want to start their own energy businesses.
They can also charge some city overhead to the revenue-producing LCE. This can help taxpayers save money: $640,000 in 2021 from a budget of roughly $234 millions.
Caudle, a 13-year veteran of the city, said that he sees himself as the entrepreneurial arm for the city government. You don’t realize the opportunities that exist until you start to get into energy. You don’t know what you don’t know. We were able to explore many possibilities, from transportation to hydrogen, by getting involved.
Proponents also hope that this greener source of energy will be scalable for cities all sizes in the coming years.
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