Featured, Original Report, Sherrie Peif, Weld County, Windsor

Exclusive subsidy to meal delivery biz has Windsor town manager’s emergency powers in question

WINDSOR — The Windsor Town Manger has used emergency powers given to him by the town board to sign a contract committing $50,000 of general fund revenue to subsidize an out-of-town business’s entry into the Windsor market.

Shane Hale was granted “emergency powers,” by the Windsor Town Board in March under the guise of a need for immediate decision making around the COVID-19 pandemic. But the resolution essentially gave open-ended, broad and vague powers to an unelected official to act without needing to seek approval of the Town Board first.

The emergency powers include (but are not limited to) such things as:

  • Create a town curfew for up to 72 hours.
  • Evacuate all or part of the town and create transportation routes.
  • Close private businesses for up to 72 hours.
  • Allocate and expend funds, execute contracts, obtain property – all with no limitations.
  • Suspend or modify any provision of any town ordinance.
  • Accept services, gifts, grants, loans, etc. – with no limitations.

Because of that resolution, Hale recently signed an agreement with NoCo Nosh, a Fort Collins and Greeley based meal delivery service that opened two years ago in response to rising delivery fees being charged to restaurants by national delivery companies such as Uber Eats, etc.

What makes NoCo Nosh unique is that it is owned by many of the restaurants it serves. However, that was a charter member agreement with select restaurants in Greeley and Fort Collins. It is not clear if restaurants can still “buy into” the business. Calls to NoCo Nosh by Complete Colorado have not been returned.  In return for being part of the venture, those restaurants agreed to use NoCo Nosh exclusively for their delivery needs.

As of the time of contract negotiations between Hale and NoCo Nosh, there were no Windsor restaurants benefiting from that agreement. In fact, emails obtained by Complete Colorado through an open record request show that at the time that Hale, along with Windsor Economic Development Director Stacy Miller, contacted NoCo Nosh there were no restaurants in Windsor utilizing the service in any capacity.

“Thank you for reaching out. For sure, we have actually been planning to go into Windsor so we can work with the restaurants there and assist them as much as we can, particularly during these most difficult times,” said NoCo Nosh founder Gleidson Gouveia in a Dec. 2 email to Miller.

Miller reached out to Gouveia after Fort Collins passed a similar resolution committing $150,000 to the company, asking if he would be willing to do the same contract with Windsor as he did Fort Collins.

“For sure,” Gleidson responded. “That would help us move into the Windsor community and more quickly start working with the restaurants there to assist them in this time of crisis.”

It’s that exclusive taxpayer subsidy of a non-Windsor business that had at least one town board member questioning the agreement.

“I’m trying to figure out how long the list is of why this feels so absolutely wrong to me,” said David Sislowski at a meeting in December, when it was initially brought to the board. “First of all, with us selecting one delivery service over the others by not issuing an RFP and having a competitive bid, we have just picked somebody who we are now going to assist in establishing their business and we are now going to subsidize their costs in order to help them penetrate the market.”

Although at least two other members — Mayor Pro Tem Ken Bennett and member Scott Charpentier — agreed with Sislowski in practice, they were not compelled enough by the argument to veto the move, which Hale under his authority could have bypassed regardless.

“I don’t like the idea of subsidizing a business,” Bennett said. “But I also know that we are in such a unique situation. We should not be in the business of picking winners and losers, so if another delivery service came to us with a proposal, we should strongly consider that as well.”

Hale did add that option, but Sislowski said it doesn’t change the problems with the subsidy in general.

It took less than two weeks from those first emails for Miller and Hale to take the plan to board members, and when the idea was first presented in December, Windsor was still operating under the “red” level of the governor’s COVID-19 response dial, which meant restaurants were allowed carry out and delivery only.

The idea was to subsidize the fee restaurants pay to delivery services for their use. However, the contract wasn’t in force until late January, after restaurants were able to reopen with limited seating, which theoretically will reduce the number of delivery meals as consumers go back out to eat in person.

Sislowski said he couldn’t see how this would help the average restaurant enough to have any real impact.

“I understand the restaurants can’t afford this type of commission at this time, and it’s important to help the restaurants as best as we can,” Sislowski said. “But I hope that they are not so close to dangerous that 15 percent of gross receipts (on deliveries) is going to tip them over.”

In fact, Sislowski said, as the contract is written, Windsor’s subsidy is likely to only guarantee income to NoCo Nosh.

The contract is valid for one year, with the ability to renew in one-year increments for up to five years. It can be canceled with a 14-day notice by Windsor. But the key wording is it will cap at $50,000, whether that takes one month or 12.

Hale said NoCo Nosh gave examples across a wide range of monthly expenses.

“Because we don’t have any residents right now using this program, they gave us a range,” Hale said at the meeting. On the low end of 1,500 meals per month, averaging $31 per meal, Windsor would cover the 15 percent charged to the restaurant and a portion of the fee charged to the customer equaling $10,000 in subsidy for the month.

Using those numbers, if just 10 restaurants sign on to the app at 1,500 meals a month, each restaurant would pocket about $700 a month in savings. The more restaurants that is split among, the smaller the savings.

“We are using taxpayer dollars wherever we pull it out of; it’s using taxpayer dollars to subsidize a service that consumers do or do not have to use. I’m having real trouble,” Sislowski said.

Sislowski also didn’t like the fact that NoCo Nosh charges the restaurant 12 and ½ percent for orders that are picked up by the customer but ordered through the app.

“At the end of the day, I think NoCo Nosh is really the only person that is going to be happy about this and will have a financial impact,” Sislowski said.

Sislowski continues to push to revoke the town manager’s emergency powers, but currently has no support among fellow board members. He said through email, however, that the board is hearing more and more from constituents that they want the powers revoked.

“I wasn’t real happy with it at the time,” Sislowski said previously. “I was surprised by the scope of authority that was granted. I wasn’t real tickled, but I figured if the rest of the board thought it made sense, I went along with it. You pick your fights.”

 

SUPPORT COMPLETE

Our unofficial motto at Complete Colorado is “Always free, never fake, ” but annoyingly enough, our reporters, columnists and staff all want to be paid in actual US dollars rather than our preferred currency of pats on the back and a muttered kind word. Fact is that there’s an entire staff working every day to bring you the most timely and relevant political news (updated twice daily) from around the state on Complete’s main page aggregator, as well as top-notch original reporting and commentary on Page Two.

CLICK HERE TO LADLE A LITTLE GRAVY ON THE CREW AT COMPLETE COLORADO. You’ll be giving to the Independence Institute, the not-for-profit publisher of Complete Colorado, which makes your donation tax deductible. But rest assured that your giving will go specifically to the Complete Colorado news operation. Thanks for being a Complete Colorado reader, keep coming back.

Comments

comments

Comments are closed.