Whose Business Is It?
The controversy over operation of a grill at a city owned golf course in Grand Junction has renewed the debate among business and community leaders over what services government should — and shouldn’t — provide.
While local government has grown in scope and helped several organizations survive into the second decade of the 21st century, some question whether or not the situation should continue.
Some of those leaders serve on the Grand Junction City Council, which recently found itself in the middle of a debate over whether a private business or the city should operate the Pinon Grill at Tiara Rado Golf Course.
When city leaders raised concerns over missing financial records and the subsequent purported underpayment of sales taxes from the private managers of the Pinon Grill, council members found themselves approving city operation of the grill. But after further examination, the council decided to rescind the decision, permit the city to operate the grill on an interim basis and find a private company to resume the operation in a few months.
In late January, Grand Junction City Manager Laurie Kadrich threw another wrinkle into the process, announcing that financial records from Pinon Grill will be audited to determine whether or not grill manager Steve Hoefer owes the city money. Hoefer declined to comment when contacted by the Business Times.
At least one member of the council said he’s concerned about the communication among city administrators, grill operators and council members.
“I would count it as an error on the city manager,” said Tom Kenyon, a council member and a real estate agent who said he favors private operation of city owned facilities because of the inefficiencies that sometimes occur under government operation.
The Pinon Grill issue — combined with a recommendation from the Grand Junction Area Chamber of Commerce and the pending contract for ambulance service — has raised questions about which services government should provide and which should be managed by private business.
“Comments that I’ve heard from the public is the city should be more supportive of private-sector jobs,” Kenyon said.
The chamber board recommended last year that the city pursue bids from private companies.
“The chamber guideline states that the public sector should not compete with the private sector when the private sector is capable and willing to deliver the service or product,” Diane Schwenke, president and chief executive officer of the chamber, stated in an e-mail to the Business Times.
The Business Times was unsuccessful in repeated attempts to reach Craig Lamberty, chairman of the chamber board when the resolution passed.
In a interview with the Business Times, Kadrich took exception to published reports that stated city officials changed their ratings scores when considering bids to operate the Pinon Grill. The report said city golf superintendent Doug Jones and others scribbled through low scores given to Two Rivers Convention Center and later replaced them with higher scores. Some score sheets that gave high scores to Pinon Grill were later changed to reflect lower scores.
Kadrich said the score change reflected a common occurrence in any subjectively graded contest. Sometimes the first candidate seems great and receives the highest possible score. Bids to operate the grill were graded on a scale of 0 to 5, with 5 being the highest score.
Then, the second candidate might be even better, causing the judge to change the first score from a 5 to a 4 or a 3. Kadrich said it would be wrong for the public to infer that city judges were trying to rig the system to ensure Two Rivers would win the bid.
Debbie Kovalik, executive director of the Visitor and Convention Bureau and the person ultimately in charge of Two Rivers Convention Center, agreed with Kadrich’s assessment of the system of judging.
Kadrich also said she was concerned the public might conclude the city put pressure on Hoefer to step down as manager of Pinon Grill. “He was not interested in the bidding process at Lincoln Park (which is awarded in conjunction with operation of Pinon Grill),” Kadrich said. “He said, ‘I want out of the restaurant business.’”
Reliable sources told the Business Times that Hoefer made the statement in the midst of frustration over the city’s bidding process and the city’s announcement that it plans to audit his books. Kadrich said Hoefer’s statement indicated to her the city needed to look elsewhere for an interim operator and for a full-time operator that could take over after the contract with Hoefer expires in February.
In addition to opposing city operation of Pinon Grill, Schwenke said the chamber opposed city efforts to expand city trash service to city annexed neighborhoods that already were served by private trash companies. The city followed the chamber’s advice on the trash service several years ago.
The chamber also weighed in about the operation of ambulance service the last time the contract was up for renewal.
“The chamber was very involved in opposing the decision that took non-emergency ambulance services out of the hands of the private sector five years ago,” Schwenke said. “We are encouraged that the city is, indeed, going out to bid for the service again and at least giving the private sector an opportunity to reclaim this line of business.”
The current contract for ambulance service expires in June. The chamber hasn’t taken an official stance on whether or not the city should allow itself to bid for the service.
The conflict-of-interest involved with an entity approving itself as an operator crossed the minds of some city council members during the Pinon Grill controversy.
After approving Two Rivers in a bidding process, council rescinded the vote and heeded the advice that came from the chamber of commerce and people in the community at large.
The issue of the grill has also caused a stir that’s reinvigorated discussion of city operated services. Ironically, the grill serves customers of a golf course owned and operated by the city. The Business Times didn’t find anyone who suggested the city get out of the golf business, but did learn of confusion about whether Tiara Rado was opened to give local residents an alternative to high fees at private courses.
“The golf courses, for instance, were developed at a time when citizens had no access to facilities other than the country club,” Schwenke said.
But Reford Theobold, a former council member and long-time resident, said Tiara Rado was constructed by a private company and later acquired by the city when the company ran into financial problems in the 1970s. The course at Lincoln Park already offered an alternative to the country club.
Rob Schoeber, current director of the Grand Junction Parks and Recreation Department, said the private company built the first nine holes at Tiara Rado before selling the course to the city in 1974. Since 1980, three more private golf courses have opened in the Grand Valley: Adobe Creek near Fruita, Chipeta Pines on Orchard Mesa and Redlands Mesa Golf Club in the Ridges area of the Redlands. Bookcliff Country Club continues to operate as a private course.
“Of course, I think government should stay out of the private sector, period,” said Bill Pitts, a member of the Grand Junction City Council who works as a real estate agent and investor and is known for his free market approach to making decisions.
As was the case with other council members interviewed for this story, Pitts would not go as far as to say the city should get out of the golf business. But like others on council, Pitts thinks private business should get a shot at running the grill and other operations.
Said Kenyon: “I’m a private-sector guy. The incentive for a private business is something the government cannot understand.”
For example, Hoefer hosted banquets and weddings in the Pinon Grill in an effort to increase profits. Yet, some golfers reportedly complained about banquets interfering with golfer access to the grill. Kadrich doesn’t think the grill should eliminate private events, but does believe such events should be curtailed.
“A wedding while people are on the golf course isn’t going to work,” she said, alluding to one complaint the city heard about Hoefer’s operation.
Kadrich also dismissed suspicions that workers were endorsing Two Rivers Convention Center to operate the grill to save city jobs. Two Rivers reduced the size of its staff last year as part of city budget-cutting efforts during the recession.
“The request for proposal was out prior to the cutbacks at Two Rivers,” Kadrich said.
Kenyon and some other local leaders are more forceful in their opinion of the operation of the Avalon Theater in downtown Grand Junction.
Kenyon said he doesn’t favor an allocation of more than the $50,000 or $60,000 a year the city earmarks for the Grand Junction Commission on Arts and Culture. He said it’s not the city’s job to provide entertainment as it does through support for the Avalon.
“I’ve advocated that we sell it,” said Gregg Palmer, who owns a downtown business. “We never intended to own it or operate it.”
City involvement began in the early 1990s when a group called Friends of the Avalon asked the city for a one-time payment to help the organization refurbish the historic building, formerly home to the Cooper Theater. Shortly afterward, the group asked the city to purchase the building.
“We reluctantly voted to go ahead and buy it,” said Theobold, who was a council member when the purchase occurred. “The next foot in the door was ‘We can’t raise enough money to operate it,’” he said of the friends’ group.
Theobold said the council at the time never intended for the city to operate a theater. “We got sucked into it and it’s turned into a slippery slope.”
Yet plans proceed to make the Avalon even larger and more costly to operate. The Grand Junction Symphony Orchestra has secured a commitment from the city to help as the symphony plans a capital campaign to raise money for a $16 million expansion of the Avalon.
Whatever the future might hold for the Avalon, ambulance service or local trash service, council has its hands full at the moment addressing operation of the Pinon Grill. Publicly, elected and appointed officials seem in concert in the pursuit of another private operation to run the grill.
“It’s very much like the airport,” said Palmer, who also serves on the Grand Junction Regional Airport Authority. “The airport opened up and operated a subway shop. We know we need food service (at the grill). We’ll do that.”
But only on an interim basis, he added. “We do not want the city to run the Pinon Grill.”
Meanwhile, the former operator of the grill faces an audit and city administrators face continued scrutiny over what services to provide — and how.