State seeks fix after license plate auction effort loses more than $100,000

Sale proceeds would benefit disability advocates

The state of Colorado is trying to find a fix for a failed effort to auction vanity license plates to raise money for people with disabilities.

Lawmakers signed off on the proposal more than six years ago, in April of 2011. The idea was to cash in on what was thought to be a robust market for personalized license plates like single letters and numbers, “5280” (the elevation of the city of Denver) and even marijuana-themed plates.

But in the six years since the plan became law, the state has only managed to auction off a few dozen plates, losing more than $100,000 on an effort one observer likened to “slowing down to catch a glimpse of a traffic accident on the other side of the freeway.”

As it stands right now, the state still has no system in place to auction off or sell thousands of vanity plates it has set aside to raise money to help people with disabilities apply for benefits. The upheaval also left grant dollars that were already promised by the state in limbo, leaving organizations that serve people with disabilities waiting months for a resolution.

THE IDEA

The seemingly confusing connection between vanity license plates and disability benefits traces back to Mark Simon, an active advocate for Coloradans with disabilities who has served on numerous state committees.

Simon learned about the lucrative sales of specialty black license plates in Delaware. Collectors there scramble for rare plates, sometimes paying tens of thousands of dollars.

Simon pitched a plan to lawmakers to start a similar effort in Colorado to fund what he saw as a glaring need: services to help people with disabilities navigate the application processes for government benefits.

His plan turned into legislation, which turned into a dysfunctional committee disbanded after four years of dismal results. Simon had a front row seat for those results – as a member appointed by the legislature to the now-defunct License Plate Auction Group.

A loss of $105,097

The License Plate Auction Group held its first meeting in April of 2012. Its final meeting happened in July of 2016. In that time, the group spent more money than it earned, finding itself unable to pay back $105,097 in public funds from a loan from another government committee.

By statute, the members of the License Plate Auction Group (LPAG) were each appointed by a different state leader, including the governor and the senate president. The resulting group was a combination of state employees and advocates for people with disabilities.

The group decided to hire a contractor to handle the auction process. But minutes from the group’s monthly meetings show they spent their first year in existence without any idea of how they would pay for that contractor. The state had not allocated any funding for the group.

By the summer of 2013, the group finally had some cash. Legislation formed a separate state committee, the Disability Benefit Support Contract Committee (DBSCC.) That group would give grants and loans for “innovative” projects that helped people with disabilities – projects like the license plate auction.

The DBSCC loaned LPAG $300,000 to get its auctions off the ground. Eventually the plan was for LPAG’s license plate auctions to generate enough revenue to not only pay back the DBSCC but also to fund more grants and loans to other projects that benefited people with disabilities. But meeting minutes detail how bureaucracy got in the way of the group ever making any profit. It took until November of 2013 to choose a contractor, who didn’t begin working with the committee until February of 2014.

One monthly meeting lasted only about 20 minutes – as members debated whether they could legally have a meeting when they had forgotten to post an agenda for the public ahead of time. Another monthly meeting had to be rescheduled for another day because “the agenda had not been posted in a timely fashion.” They continually discussed whether they had the number of members present needed to discuss state business, and appeared to need the attorney general’s office to sign off on nearly every discussion they had.

By the spring of 2014 LPAG started meeting several times a month, ramping up for what they hoped would be a black tie live auction in August. The group anticipated Governor John Hickenlooper would attend their event and “also presented a list of people for the Governor to personally invite. These are the people who have made gifts of more than $1 million in the last 6 years, the 20 billionaires in the state, minus people who are politically opposed to the Governor.”

The group planned to auction off just four plates they thought would draw huge interest: BRONCO, 5280, 13 and GOLFER. Their contractor paid to buy print advertising, sent press releases to local media, created promotional videos, handed out business cards at a Broncos game, created a Facebook page and sought sponsors for their four plates.

But about two weeks before the event, meeting minutes show the group hit the brakes. Only 40 people had RSVP’d for the event, with only three people registered to bid online. The governor could no longer attend. The contractor worried LPAG would lose money on the event. They decided to punt – they would postpone their live event until January, turning their August auction into an online-only venture with an assortment of less desirable plates like “SPOILED” and “SWEET.”

They would hold on to their crown jewel plate, “BRONCO,” until their rescheduled live event in January 2015 when they figured the team would be making a playoff push. They would also consider auctioning plates with the valuable numbers 7 (John Elway’s number) and 18 (Peyton Manning’s). They also figured they would be able to set their event around the governor’s schedule.

The group was pleased to see their back-up plan, the online auction, raise close to $11,000. They were even more encouraged after hearing from people who asked about various other plates. They made plans for another online auction in October. But those plans never materialized because the group received a complaint claiming their online auction website violated an existing patent.

"AWKWARD"

Colorado’s License Plate Auction Group held their first (and only) live auction event in January of 2015. The group’s records indicate only three plates sold at the live auction – the letter “X” sold for $20,000, the number “5” sold for $8,500 and “5280” sold for $6,800. The group sold $1,200 worth of tickets to the event. And about a dozen plates sold in the simultaneous online auction, many of them marijuana-themed (like “GRASS” and “ZIGZAG” and “HIGH,” which each went for $500.) Bidding on the so-called crown jewel of the offered plates, “BRONCO,” fell short of the group’s minimum bid of $10,000 – so the plate didn’t sell at all.

At first, meeting transcripts indicate the group considered their event to be a mild success. They spent close to $20,000 putting on the event and brought in $45,000 in ticket sales and plate proceeds. And one group member said the man who shelled out $20,000 for the letter X also offered to pay up to $100,000 for the number 1 (which had not yet been offered for auction) – and offered to bring “a minimum of 35 registered millionaires to the next event.” The group voted to put the “1” plate up for auction, but because of its ongoing patent dispute, it had no online system for selling plates.

In the spring of 2015, the License Plate Auction Group paid a consultant $1,800 to facilitate a retreat, explaining they needed “to discover how the LPAG could become more effective. The number of individuals from state agencies makes the committee less agile. First auction was not as successful as hoped.” At the retreat, the group members decided to explore joining forces with the DBSCC – the same committee that loaned them $300,000 to get their auctions off the ground. The two committees began joint meetings to come up with a legislative proposal to work together.

In April, those plans screeched to a halt when a group member received an “anonymous report” from an auction guest who harshly reviewed the January event. The group decided the report came from a competitor with an ax to grind – a business that sells personalized license plates for another state and had expressed interest in running Colorado’s auction effort. 

The report called the event “a sub par evening which concluded with a dismal auction.” The writer described the food options – including a macaroni and cheese bar with choices of toppings like bacon and steak – as “meh.” The open bar, stocked with Coors beer and two choices of wine, was “meh,” too. The writer said most of the guests appeared to be members of the auction group and their friends, and only two men appeared to have any interest in bidding. The report included photos of the seemingly poor turnout.

“The auctioneer was a professional, complete with a bidding assistant, and was quite entertaining given the lack of bidding from the audience,” the report read. “Heck, I wanted to bid just to start the ball rolling on something! It was an amazingly awkward position for everyone in the room. No one dared to look up, or the auctioneer was bound to make eye contact. Halfway through the bidding I looked around and most of the people had already left the event.”

“Overall, the auction was entertaining and worth watching. I would compare it to slowing down to catch a glimpse of a traffic accident on the other side of the freeway,” the report concluded.

The review sent the group into a tailspin. LPAG decided to hire a mediator from the Judicial Arbiter Group to investigate the “anonymous report of unethical conduct,” but it took months to even get the approval for funding to pay for the investigation. In the meantime, LPAG lost its spending authority. Meeting minutes show the group limped along month after month, delaying the discussion of any future auctions until the resolution of the independent investigation, sometimes discussing why they were even meeting at all.

The long-awaited independent investigation was short of three pages long. The arbiter interviewed with three members of LPAG and the auctioneer, concluding, “I do not believe there is any evidence of unethical or illegal conduct in connection with the LPAG live auction … it was an attempt at a fundraising effort that lacked the execution necessary to be successful.” LPAG paid the Judicial Arbiter Group $4,000 for the investigation, after a $1,688 “courtesy discount.”

The state blew up both the LPAG and the DBSCC in favor of a new committee, the Disability Funding Committee.

CHANDA PLAN

Chanda Hinton Leichtle came to the Disability Funding Committee’s first meeting looking for answers. The DBSCC committed to giving her nonprofit, the Chanda Plan Foundation, a two-year $50,000 grant to help fund a new health center for people with disabilities in Lakewood. The goal at the health center is to combine primary care and holistic treatments along with yoga classes and cooking classes. When patients enter the clinic, they’re greeted with a zen garden.

“It's like a spa oasis,” she told Denver7 on a tour of the construction site. “I love that piece because it really defines … people with disabilities and how health care looks to them. I think that people think that health care always has to be sterile and boring and uninviting and in reality that's not the case.”

The DBSCC’s implosion, brought about because of the License Plate Auction Group’s failure, left the 2016 installment of the Chanda Plan’s grant in limbo.

“When you make that commitment, you make that commitment. You don't back out on that commitment,” Hinton Leichtle said. “In my public comment, if I had the chance, I would really express to them that I am a representative of an organization that was committed funds. And that regardless of the change, regardless of the committee members, the intent was to never abandon organizations that were committed funding. And that's what's happened, and I think it's pretty poor.”

Hinton Leichtle said her organization’s new health center ran into construction delays after securing the grant from the DBSCC. The health center opened its doors in April. She explained to the committee that her organization had yet to spend the first $25,000 installment of her grant – first because of the construction delays, then because of a letter she received from the DBSCC saying the new committee might ask her to repay the unspent grant money.

“I feel that we've been treated poorly. I feel that we've been accused of using funds inappropriately. We've done everything by the books,” she said. “We get $500,000 [in funding] from organizations, foundations, and we're never once questioned about the intent of who we are and our services because they believe in us.”

“This committee is not necessarily bound by the actions of the previous license plate group or the funding committee,” said Doug Platt, spokesperson for the Disability Funding Committee. “So they're doing their due diligence and looking at prior grant applications to look at them fairly, objectively and completely before they move forward with issuing any new grant money out.”

In May, the committee voted to promise that they would not ask Chanda to return the initial $25,000 grant. But they told Hinton Leichtle she would have to file a new application for the next $25,000 grant after filing reports about how the initial installment is spent.

ROAD AHEAD

The Disability Funding Committee has met monthly since October and has opened each meeting up to public comment. The committee does not yet have a plan in place to auction the thousands of vanity plates still reserved for auction. In April, the group decided to draft a Request for Proposals or RFP to allow potential auction vendors to submit plans to run the state’s auctions. The RFP has yet to be released and the process will likely take several months before a vendor is chosen.

Chairman John Gay said he is hoping to have auctions up and running by the end of the year. And the new committee’s spokesman says progress is being made.

“This committee needs to move forward and it needs to move forward in a thoughtful way. I'll reinforce that we have 13 citizen volunteers, these are not state employees, these are not all attorneys, these are citizen volunteers who need to be educated about the disability community, about how the Division of Motor Vehicles works, about the process of procurement with the state. And that takes a bit of time,” said Doug Platt. “This committee is working in that direction, maybe not as quickly as some individuals would like, but with an eye towards their responsibility toward the entire state and every taxpayer of the state of Colorado.”

Mark Simon attends or calls in to every meeting of his brainchild committee, no longer a member, now simply an observer. Simon does not shy away from giving the group his input in meetings about their ideas. Simon would not speak to Denver7 on the record for this story, but he delivered an impassioned speech as our cameras rolled as the committee closed its first meeting in October.

“I have six years of my life invested in trying to get this thing off the ground and make it go,” he said. “I wrote the legislation. This has consumed a huge chunk of my life. The thing I ask most of you folks is one, keep your eye on the prize. The prize is, we have people who are desperate for the assistance these funds are intended to provide. Please don't get mired in bureaucracy. Don't make the same mistakes that your predecessor committee made … learn from what those committees have done. Don't reinvent the wheel. And for God's sake let's sell some license plates folks!”

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