2016-2017 Final Report HMR Audit Report

Recommendations 5

• R1
  Identify and prioritize service objectives for contractors; a. Cities can identify specific performance objectives addressing towing response times, wait times for customer service over the phone and at the counter, customer complaints resolutions, and other objectives.
• R2
  Contract Management  Of the twelve surveyed cities, 10 cities used an open and competitive bidding process for selecting towing vendors in their most recent solicitations. Inglewood and Whittier stood out from the common practice of issuing RFPs to select towing vendors.  On average, the surveyed cities offer base contract agreements for four years, but extensions vary greatly. The most notable is West Covina where towing vendors went from serving a three-year contract term to a 10-year extension and could end up with a 13 year or more term if granted the five-year extensions allowed in their contract.  Almost every city requires that their towing vendor maintain a primary storage facility and office within or proximate to the contract city’s limits. In addition, every city measures the response time for tow trucks dispatched to police calls, the average maximum response time being 20 minutes for a tow truck to arrive on scene to a call.  Out of the twelve surveyed cities, seven stipulate in their contracts that their towing vendors must provide periodic reports, usually monthly or quarterly, detailing towing activity, service charges, and franchise fee payments. These more specific requirements put the contracting city in a much better position to monitor their contractors’ and police department’s performance and to better ensure that improper towing and storage activities are not taking place.  Of the twelve cities, nine maintain contract clauses that require some performance reporting. However, six of these cities only required evaluating customer complaints or tow response time performance and two cities only vaguely state that the police chief retains the right to review contractor performance. Glendale stood out from its peers for requiring their vendors track and monitor several performance measures including response time for answering city calls, wait times for customer calls, and implementing a Quality Assurance Plan to meet 93 other performance standards outlined in their contract.  Through more extensive performance-based contracting, cities can identify and prioritize service objectives for contractors; develop a system to collect and analyze performance data; establish contract provisions for meeting, exceeding, or not meeting performance objectives; and link contractor performance to future procurement decisions. This process can help cities hold their towing contractors more accountable to the community. Cities and their Towing Vendor Selection Of the twelve surveyed cities, ten used an open and competitive bidding process for their most recent selection of tow and impound service vendors. As displayed in Exhibit 2.1, the majority of cities surveyed selected their vendors through an open and competitive bidding process. Exhibit 2.1: Last Round of Competitive Bidding for Tow Contractors Year Last Cities Current Towing Vendors Competitively Bid? Baldwin Park Royal Coaches 2014 Beverly Hills Tip Top 2012 El Monte Freddie Mac's 2016 Glendale (1) Gay's, (2) Mid Valley, (3) Crescenta Valley 2016 Glendora Jan's 2006 Huntington Park Mr. C's 2016 Inglewood (1) B&H, (2) Bryant's Not Applicable Irwindale (1) Jan's, (2) Royal Coaches 2016 Montebello Helms & Hill 2009 San Fernando Black & White 2014 West Covina Royal Coaches 2009 Whittier (1) Hadley Tow, (2) Bob & Dave's Not competitively bid Source: Civil Grand Jury survey responses and review of towing contracts Inglewood and Whittier stood out from the common practice of issuing RFPs to select towing vendors. Unlike the majority of its peers, Whittier does not maintain a policy or practice to use an open, competitive bidding process for selecting towing vendors. The City of Inglewood does not award towing franchise agreements, but issues towing business permits to participate in the city’s pool of towing referrals. Towing vendors must apply for a permit, get approved by the Police Department, and are subject to annual reviews to renew their permits. It is important to note that a few of the cities in this study recently changed their towing vendors. These cities are: • Glendale: In October 2015, the City Council directed city staff to conduct a competitive bidding process for reviewing towing services, leading to the recent 2016 contract awards to Gay’s, Mid Valley, and Crescenta Valley. Prior to this bidding process, the last competitive contract awards were in 2006 at which time the city awarded franchise contracts to Gay’s, Crescenta Valley, and Monterey to serve three separate districts, and Sunset was selected for citywide heavy duty towing. Sunset eventually closed its business, and Monterey was not selected in the most recent contract award due to a history of struggling to comply with the city’s performance standards. Crescenta Valley was recently purchased by Hadley Tow, which also serves the City of Whittier. • Huntington Park: Prior to Mr. C’s, Huntington Park had engaged HP Tow as their official towing vendor with a service agreement from 1999 through 2015. HP Tow received numerous contract amendments from 1999 until February 2016 when the city terminated its contract citing HP 11 Tow’s gifts to a city councilmember as a breach of its service agreement prohibiting gifts to city officials. • In 2009, West Covina awarded two towing franchise agreements to Royal Coaches and Bob’s to serve separate regions in the city. The city terminated its contract with Bob’s in July 2016 for undisclosed reasons related to ongoing litigation between the two parties. Royal Coaches currently serves the whole city in the interim. • In September 2014, the Whittier City Council delayed renewing their service agreement with Hadley due to multiple performance issues relating to drivers exceeding speed limits and committing other traffic and parking violations, consuming alcohol and narcotics while on duty, and hard selling customers. The business also had been cited for inappropriately storing police holds and illegally discharging wastewater into the county storm drains. Despite the Police Chief’s recommendation to award the towing contract to Bob’s solely, the City Council renewed Hadley’s service agreement in December 2014, and they started service again in April 2015 after meeting contractual service requirements. Length of Towing Vendor Contract Terms On average, the surveyed cities offer base contract agreements for 3.75 years, but extensions vary greatly. Exhibit 2.2 below presents term information for current tow and impound vendor contracts. Exhibit 2.2: Current Length of Contract Terms for Tow Contractors Years in Maximum Possible, City Towing Vendors Current Term of Contract Base Term with any Extensions Baldwin Park Royal Coaches 2014-2018 4 4 2012-2013; four 1-year 5 Beverly Hills Tip Top extensions 1 El Monte Freddie Mac's 2016-2020 4 4 (1) Gay's, (2) Mid Valley, 2016-2021; two 2-year Glendale (3) Crescenta Valley extensions 5 9 2006-2012; 4-year extension to Glendora Jan's 2016; four 1-year extensions 6 12 Huntington Park Mr. C's 2016-2021 5 5 Inglewood (1) B&H, (2) Bryant's Annual permit renewal 1 1 (1) Jan's, 2017-2020; 6 month extension, Irwindale (2) Royal Coaches month-to-month 3 3.5+ 2009-2014; annual extensions 5+ (no max.) Montebello Helms & Hill without a cap 5 San Fernando Black &White 2014-2019; 5-year extension 5 10 2009-2012; extension from West Covina Royal Coaches 2012-2022; 5 year extensions 3 13+ (1) Hadley Tow, Hadley: 2015-2018 / B&D: 2014- Whittier (2) Bob & Dave's 2017; two 1-year extensions 3 5 Average 3.75 n.a. Source: Civil Grand Jury surveys and review of towing contracts 12 Although the average base contract term is four years, there are notable differences in extension agreements. The most notable is West Covina where towing vendors went from serving a three-year contract term to a 10-year extension and could end up with a 13 year or more term if granted the five year extensions allowed in their contract. While there may be a limited pool of vendors able to bid on these towing and impound contracts, it is still in the cities’ best interests and a best practice to regularly competitively bid these contracts. The impact of doing so is to keep the vendors competitive on price and performance. Competitive bidding every three to five years would be a reasonable standard for the twelve cities. Contract provisions that allow for terms of 9-13 years and more are not in the best interests of the cities or the public. Operational Requirements and Response Times Require a Local Presence Almost every city requires either in their municipal code or service agreements or operating permits that their towing vendor maintain their primary storage facility and office within city limits, or within a few miles of city limits, of the contracting city. In addition, every city measures the response time for tow trucks dispatched to police calls, the average maximum response time being 20 minutes for a tow truck to arrive on scene to a call. Facility location and response time requirements are highlighted below. Exhibit 2.3: Location and Response Time Requirements Storage and Office Location City Requirements Response Time Requirements 25 minute monthly average, 30 minute Baldwin Park Within five miles of city limits maximum Beverly Hills Within seven miles of city limits 15 minute maximum El Monte Within five miles of city limits 15 minute maximum No more than half a mile outside city 15 minute maximum from 7am-7pm; 30 Glendale limits minute maximum from 7pm-7am 20 minute maximum from 7am-6pm; 25 Glendora Within city limits* minute maximum from 6pm-7am Huntington Park Within five miles of city limits 20 minute maximum Inglewood Must be in city limits 15 minute maximum Within five miles of City Hall or six miles 15 minute average; 20 minute maximum; 15 Irwindale from city limits at Chief's discretion minute maximum for critical incidents Montebello Within city limits 15 minute maximum Within five miles from the Police 15 minute maximum; must dispatch within San Fernando Department 10 minutes West Covina No requirement 15 minute maximum 15 minute average; 20 minute maximum; 15 Whittier Within city limits minute critical incident Source: Review of city ordinances and towing service agreements *Glendora’s original contract with Jan’s Towing required their primary storage facility and office to be within city limits; however, the city amended this requirement in their 2012 extension to permit Jan’s primary facility for Glendora’s tows to be in an adjacent city, Azusa. National Institute for Governmental Purchasing Business Council: White Paper 2014. Everybody Wins: Crafting a Solicitation that Fosters Transparency, Best Value, and Collaborative Partnership 13 Reporting Requirements on Towing Vendor Finances and Towing Related Activity are Inconsistent and Often Minimal Although every city requires their contractors to maintain detailed records documenting fees paid to the city and towing activity, only seven cities require that their contractors automatically provide monthly or quarterly reports to city management summarizing their vehicle tow and impound activities. Requiring the towing contractors to keep records on hand for city review is not as effective as a management tool because there is no guarantee that cities will allocate resources to regularly review these records. Besides tow and impound record requirements, most of the surveyed cities lack a structured process to evaluate their tow contractors’ performance. Out of the 12 surveyed cities, seven stipulate in their contracts that their towing vendors must provide periodic reports, usually monthly or quarterly, detailing towing activity, service charges, and franchise fee payments. Although five cities do not include financial reporting requirement clauses in their contracts, every city requires that their towing vendors at least maintain detailed financial records subject to audit. This unfortunately does not guarantee that the tow contractors will maintain the records as required or that the cities will regularly review them and monitor tow contractor performance. Such a review can become an extra non-routine task and requires allocating staff resources to an extra duty. The more effective approach is to require regular tow contractor reporting, as is the case in seven of the surveyed cities, to ensure that the tow contractors are maintaining the proper records and that City management staff will always have the records at their disposal for review and monitoring. Financial reporting requirements for the twelve surveyed cities are summarized below in Exhibit 2.4. Exhibit 2.4: Twelve Surveyed Cities’ Financial Reporting Requirements for Tow Contractors Contractor Required to Regularly Submit Financial Reports City to City? Financial Reporting Contract Requirements YES NO Baldwin Park  Annual and monthly payment reports Beverly Hills  Monthly reports of itemized services and charges  Contractor must maintain detailed records of all transactions subject to inspection by El Monte City.  Monthly reports of itemized charges for all towing activity and quarterly reports Glendale detailing towing activity and the calculation of release fees (VTACR) owed to city Glendora  Monthly report of activity detailing service charges and lien sales Huntington Park  Annual report of all gross receipts earned Inglewood  Contractor must maintain detailed records of all transactions subject to inspection Irwindale  Quarterly reports of gross receipts and lien sales records Montebello  Contractor must maintain detailed records of all transactions subject to inspection San Fernando  Quarterly payment reports itemizing towing activity West Covina  Contractor must maintain detailed records of all transactions subject to inspection Whittier  Contractor must maintain detailed records of all transactions subject to inspection Source: Review of city towing contracts 14 In addition to financial information, eight of the twelve cities surveyed include additional reporting requirements in their towing contracts. Sometimes integrated with the monthly financial payments and reports, the eight cities require that their vendors provide detail on the volume of vehicles being towed, released, or lien sold, along with other descriptive information. As can be seen in Exhibit 2.5, the information requirements vary among the eight cities that require such reporting. The most common requirement is listing all tows, impound and lien sale activity. While this is useful information to have, other cities require specific information that enables them to better assess the performance of their tow contractors and the impact of their towing and impound policies and practices on members of the public. These requirements include vehicle descriptors (make, model, Vehicle Identification Number, owner information), dates of impound and release (which allows for assessing total impound time), and police case numbers (to easily track cases back to individual officers and incidents). The cities of Glendale and Irwindale specifically require that tow location information be reported and the cities of Irwindale and San Fernando require information on the incident that led to the tow. Finally, the City of Glendale alone requires that their contractors report when personal property found in vehicles is inventoried. Exhibit 2.5: Tow Contractor Activity Reporting Required by Surveyed Cities Must Report Must Report Regular Amount Must when Must Report No Activity Activity of Time Report Personal Information Reporting Report Vehicle Tow Property on Tow City Requirements Required Stored Location Inventoried Incident Baldwin Park  Beverly Hills   El Monte   Glendale     Glendora  Huntington Park  Inglewood  Irwindale     Montebello  San Fernando    West Covina  Whittier  TOTAL 5 7 5 2 1 2 Source: Review of city towing contracts These more specific requirements put the contracting city in a much better position to monitor their contractors’ and police department’s performance and to better ensure that improper towing and storage activities are not taking place. Adding these reporting requirements to all contracts and regularly reviewing the information would provide greater assurance to the public that that their city’s towing and impound operations are functioning efficiently and properly. Performance Reporting Requirements are Inconsistent and Often Minimal Although most cities impose important reporting requirements on towing activity and financial disclosure, most contracts lack detail on how the city will assess the performance of their towing vendors and use such evaluations in considering contract awards or extensions. As can be seen in Exhibit 2.6, four cities do not require any performance reporting by their tow contractors. Two additional cities do not mandate reporting of performance metrics but require that the vendors maintain the information available upon request by the cities. Of the cities that do mandate regular performance reporting, tow response times and customer complaints are the most commonly used metrics. Other notable metrics are found in the City of Glendale, which requires that their tow vendors maintain and provide records on phone wait times and a Quality Assurance Plan detailing how the vendor will meet 93 performance standards outlined in their contract. Exhibit 2.6: Performance Metrics in Agreements between Cities and Tow Contractors Performance Metrics Reported or Evaluated by City No Quality Performance Tow Phone Assurance Reporting Response Customer Wait Plan City Required Time Complaints Time Compliance Baldwin Park  Beverly Hills  El Monte  * Glendale * * * * * Glendora  * Huntington Park *  Inglewood  * Irwindale * Montebello *  San Fernando  * West Covina *  Whittier * * Source: Review of city towing contracts and ordinances *This city does not mandate regular reporting but requires that the city have specific records available for inspection in the performance areas shown. Of the 12 cities, nine maintain contract clauses that discuss performance reporting; however, four cities (Huntington Park, Irwindale, Montebello, and West Covina) focus on evaluating customer complaints, and two other cities (Inglewood and Whittier) only vaguely state that the police chief retains the right to review contractor performance. Baldwin Park and Beverly Hills require their contractors to address their response times on a monthly basis. While most cities address contractor performance in one or two areas, Glendale stood out from its peers for requiring their vendors to track and monitor several performance measures including response time for answering city calls, wait times for customer calls, and implementing a Quality Assurance Plan to meet 93 other performance standards outline in their contract. Towing Vendors Can Be Better Managed Through Performance-Based Contracting Since the Vehicle Code details administrative requirements for towing, storing, and auctioning lien vehicles, cities are not required to develop extensive local regulations for administering these local programs. As demonstrated in the results of the Civil Grand Jury survey of twelve cities, only one city had developed a comprehensive contract management plan and integrated it into their towing franchise agreement while five cities failed to incorporate any specific performance reporting requirements. Although the other six agencies mentioned some performance metrics in their contracts, monitoring only customer complaints or response times is not a comprehensive approach to monitoring a towing vendor’s overall service to the public. Compounded by the fact that just about every city requires tow vendors to maintain facilities and offices within or near their city limits, and to swiftly respond to dispatch calls between 15 to 30 minutes, competition for open bids can be minimal or nonexistent. Cities then run the risk of engaging in long term contracts that provide little oversight and accountability. With enhanced performance-based contract management, cities and the public can be more informed about the service being provided by their towing contractors and their impact in the community. Best practices in contract management recommend that governments adopt the following process when entering into contract agreements: 1) Identify and prioritize service objectives for contractors; a. Cities can identify specific performance objectives addressing towing response times, wait times for customer service over the phone and at the counter, customer complaints resolutions, and other objectives. 2) Develop a system to collect and analyze performance data; a. Cities could require periodic reporting of performance statistics to assess the impact of their towing vendors on the community. Data could include activity measures, such as the volume of vehicles towed, stored, impounded, and lien sold, as well as performance measures to assess compliance with service objectives. 3) Establish contract provisions for meeting, exceeding, or not meeting performance objectives; a. In addition to simply stating that the city may terminate its contract at any time due to noncompliance with the terms of a contract, cities could also impose liquidated damages against contractors based on the volume and severity of contract violations, and specify corrective action steps to remedy contract violations. Alternatively, if a contractor meets or exceeds service objectives, the contract should require that this performance be used when approving rate adjustments or providing bonuses. 4) Link contractor performance to future procurement decisions; a. Since most contracts offer term extensions, contracts should require that contractor’s documented performance against defined service objectives be used in determining whether the contractor deserves a contractor renewal or extension. 17 5) Reflect the provisions outlined above, as well as the process for regular performance monitoring, in the final agreement.2 Recommendations 2.1 All cities should adopt performance-based contract management approaches like Glendale to better monitor and evaluate their towing contractors and their impact on the community. 2.2 The City of Whittier should implement a competitive bidding process for their towing services upon the completion of their current contract term to conform to procurement best practices and negate the appearance of impartiality or bias. National Performance Management Advisory Commission. A Performance Management Framework for State and Local Government: From Measurement and Reporting to Management and Improving. 2015. 18
• R3
  Fees  Of the twelve surveyed cities, six impose franchise fees on their tow vendors through flat fees charged per vehicle towed, ranging from $45 to $250 in 2015. Another four cities imposed franchise fees as percentages of their vendors’ gross revenue for towing related activities ranging from seven percent to 30 percent. Two cities, Beverly Hills and Whittier, chose not to impose a franchise fee on their towing contractors.  All cities impose a vehicle release fee paid to the cities by vehicle owners before their impounded vehicle can be released. These fees range from $50 to $245 for basic vehicle releases. Seven cities also charge different release fees when vehicles are towed for specific reasons, such as DUI arrests and other police impounds.  The current median tow fee charged by towing and impound contractors for a regular vehicle is $175, ranging from a low of $118.50 in Glendale to a high of $205 in El Monte, a 73 percent difference.  The current median daily storage fee for a regular vehicle is $52, ranging from a low of $33 in Inglewood to a high of $60 in El Monte and Huntington Park.  Of the nine tow vendors that provided this information in the survey, on average, 57 percent of vehicles impounded in 2015 were released within the first three days, but 32 percent remained on the lot for a week or more.  Total fees paid be vehicle owners for vehicles retrieved after one day range from a low of $228 in Glendale to a high of $494, or over twice as much, in Baldwin Park. Median fees after one day of storage in the twelve surveyed cities are $347. Vehicles retrieved after seven days face median fees of $659, ranging from a low of $450 in Glendale to a high of $818 in Baldwin Park, or 82 percent more.  Cities have an obligation under State law to ensure that their franchise fees and administrative release fees are recovering no more than the actual and reasonable cost of administering their towing program. At least six cities have not adjusted their franchise fees in several years, indicating that cities may not be regularly assessing the administrative costs of their towing programs. Franchise Fees and Vehicle Release Fees Paid to Cities Vary Significantly Pursuant to the California Vehicle Code, cities can recover the cost of administering towing programs in two ways. First, Vehicle Code Section 12110(b) allows cities to impose franchise fees on towing vendors; however, the fee “may not exceed the amount necessary to reimburse the public entity for its actual and reasonable costs incurred in connection with the towing program.” In addition, Vehicle Code Section 22850.5 allows cities to impose fees on vehicle owners to recover the cities’ administrative costs 19 relating to the removal, impound, storage, or release of their vehicles. This most commonly manifests as a vehicle release fee. Exhibit 3.1 below highlights the franchise fees charged to each city’s towing vendor and the release fees passed onto customers. Exhibit 3.1: City Franchise and Release Fees, 2015 City Release Fee Paid by City Franchise Fee paid by Tow Vendors Vehicle Owners1 $125 per vehicle from police calls; 25% of gross receipts from owner calls, 30-day Baldwin Park impounds, and lien sales (minus lien fees) $245 all releases $117 basic; $162 investigative Beverly Hills None release $120 basic; $240 impound; El Monte $125 per vehicle $500 DUI; $720 prostitution $72 basic; + $35 for DUI; $20 Glendale $250 per vehicle, all vendors for oversized Glendora $75 per vehicle $120 all releases $108.23 basic; $159.16 Huntington Park 14% of gross receipts2 impounds; $318.30 DUI Inglewood 7% of gross receipts, all vendors $150 basic; $150 DUI 30% of impound/storage, 10% of lien $50 basic; $150 impound; $325 Irwindale sales for DUI Montebello $154 per vehicle $180 all releases San Fernando $45 per vehicle $130 impound 30% of gross receipts from Royal Coaches West Covina with a $100,000 annual minimum3 $178 all releases $121 basic; $230 DUI; $200 30- Whittier None day impounds Source: Review of towing contracts, city websites, and Civil Grand Jury survey responses. 1Release fees for “impounds” are referring to vehicles that were towed in accordance with Vehicle Code sections prohibiting driving with a restricted license or without a license, and other police holds. 2Huntington Park terminated a long-standing contract with HP Tow in 2016 that imposed no franchise fee. 3West Covina recently terminated a secondary contractor, Bob’s Tow, in 2016. Their franchise fee equated to 34% of gross receipts minus owner notification fees. Of the twelve surveyed cities, six of them charged franchise fees from their tow vendors in 2015 through flat fees charged per vehicle towed, ranging from $45 to $250. Another four cities’ franchise fees were based on percentages of gross revenue for the vendors’ towing related activities, ranging from seven percent to 30 percent. Two cities, Beverly Hills and Whittier, chose not to impose franchise fees on their towing contractors. As for release fees paid to the cities by vehicle owners in 2015, all cities imposed fees on owners when releasing vehicles, ranging from $50 to $245 for basic vehicle releases. Seven cities also imposed different release fees when the vehicles were towed for specific reasons, such as DUI arrests and other police impounds. Cities Collected a Wide Range of Revenue from Franchise and Vehicle Release Fees Since local jurisdictions manage their towing contracts in different ways, revenue from franchise and release fees depend upon how a city calculates its actual costs for administering its towing program. Exhibit 3.2 provides the surveyed cities’ revenues from tow vendors for 2014 and 2015. Exhibit 3.2: City Franchise and Release Fee Revenues, 2014 and 2015 Total Vehicle Release Total Franchise Fees Total Tow Vendor Fees Total Tow Vendor Fees City Fees Paid by Vehicle and Release Fees Paid Paid to City, 2014 Paid to City, 2015 Owners to City, 2015 to City, 2015 Baldwin Park $314,949 $318,513 $334,070 $652,583 Beverly Hills Not Applicable Not Applicable $176,202 $176,202 El Monte $47,575 $76,145 $176,190 $252,335 Glendale $273,830 $364,379 $33,530 $397,909 Glendora $63,150 $43,275 $28,540 $71,815 Huntington Park Not Reported Not Reported $102,878 $102,878 Inglewood $22,294 $44,503 Not Reported $44,503 Irwindale $51,814 $47,154 $30,250 $77,404 Montebello $201,740 $197,120 $130,462 $327,582 San Fernando Not Applicable $20,753 $23,841 $44,594 West Covina $144,004 $98,059 $47,882 $145,941 Whittier* $8,200 $9,000 $92,453 $101,453 Median $63,150 $61,650 $92,453 $124,410 Minimum $8,200 $9,000 $23,841 $44,503 Maximum $314,949 $364,379 $334,070 $652,583 Source: Review of Civil Grand Jury city surveys Note: Beverly Hills did not provide franchise fee revenues for 2014. Huntington Park changed towing contactors in 2016, its prior contractor, HP Tow, was not required to pay any franchise fee. *City of Whittier vendor fees are for 30 day impounds only. As can be seen in Exhibit 3.2, median franchise fee revenue in the ten cities that required payment from their tow vendors was $61,650 in 2015, ranging from a low of $9,000 in Whittier to a high of $364,379 in Glendale1. Two cities, Beverly Hills and Whitter, did not impose franchise fees on their tow vendors in 2015 and instead covered their administrative costs for their tow and impound program through release fees, or possibly with their own resources. Median release fee revenue paid to the cities by vehicle owners in 2015 for all cities that reported this revenue was $92,453, ranging from a low of $23,841 in San Fernando to a high of $334,070 in Baldwin Park. The broad range of fee revenue collected from tow vendors and vehicle owners whose vehicles are towed and stored by the tow vendors for the surveyed cities indicate that cities take very different approaches to how much of their tow and impound program costs are paid for by vehicle owners, how they identify the allowable costs that can be recovered through these fees and the extent to which these costs are ultimately passed on to the vehicle owners. The City of Whittier charges vendor fees for 30 day impounds only. The Current Median Tow Company Towing Fee for a Regular Vehicle is $175, Ranging from $118.50 to $205 All vehicles towed are subject to a one-time basic tow fee imposed by the towing vendor. All cities regulate tow fees through their service agreements, of which adjustments must be approved by the contracting city. Aside from Inglewood and Irwindale, we found that every city with multiple tow vendors requires that all of their vendors charge the same towing fees. Exhibit 3.3 presents the array of base tow fees. The range of rates presented show that the cost to vehicle owners can vary significantly depending on the jurisdiction in which their vehicle is towed. The lowest tow fee for a regular vehicle is $118.50 in Glendale, while the highest is $205 in El Monte, or 75 percent higher. The median is $175, Exhibit 3.3: Tow Contractor Tow Fees Reported in Survey City Regular Vehicle Motorcycle Medium Heavy Duty Baldwin Park $195 $195 $230 $325 Beverly Hills $160 $80 $250 $350 El Monte $205 $205 $205 $205 Glendale $118.50 $118.50 $118.50 $227.00 Glendora $175.00 $175.00 $235.00 $325.00 Huntington Park $185 $185 $250 $350 Inglewood $121.90 (1)$169.65; (2)$121.90 $183.55 $255.55 Irwindale (1)$175; (2)$195 (1)$175; (2)$195 (1)$235; (2)$230 $325 Montebello $154 $154 $250 $350 San Fernando NA NA NA NA West Covina $195 $195 $230 $325 Whittier $175 $175 $193 $257 Median $175 $175 $230 $325 Minimum $118.50 $80 $118.50 $205 Maximum $205 $205 $250 $350 Source: Review of Civil Grand Jury towing vendor surveys; San Fernando has not provided its fee schedule. Inglewood: (1)=Bryant’s; (2)=B&H Irwindale: (1)=Jan’s; (2)=Royal Coaches Current Median Daily Storage Fee among Survey Cities for a Regular Vehicle is $52, Ranging from $33 to $60 All vehicles towed are subject to daily storage fees imposed by the towing vendor. All cities regulate storage fees through their service agreements with their tow vendors, for which any adjustments must be approved by the contracting city. Aside from Irwindale, every city with multiple vendors requires that they charge the same towing fees. Exhibit 3.4 shows the array of daily storage fees. As with the base towing fees presented above, the variation in fees can result in very different costs for the vehicle owners depending on the city in which 22 their vehicle is impounded. The lowest daily storage fee for a regular vehicle is $33 in Inglewood, while the highest fee is $60 in El Monte and Huntington Park. The median is $52. Exhibit 3.4: Current Tow Contractor Daily Storage Fees City Regular Vehicle Motorcycle Medium Heavy Duty Baldwin Park $54 $54 $57 $60 Beverly Hills $42 $35 $65 $75 El Monte $60 $60 Glendale $37 $10 $41 $52 Glendora $52 $30.00 $57.00 $65.00 Huntington Park $60 $60 $60 $60 Inglewood $33 $15.28 $53.66 $53.66 Irwindale (1)$52; (2)$54 (1)$30; (2)$54 $57.00 (1)$65; (2)$60 Montebello $52 $52 $55 $65 San Fernando NA NA NA NA West Covina $54 $54 $57 $60 Whittier $45 $45 $50 $60 Median $52 $49 $57 $60 Minimum $33 $10 $41 $52 Maximum $60 $60 $65 $75 Source: Review of Civil Grand Jury towing vendor surveys; San Fernando has not provided its fee schedule. Irwindale: (1)=Jan’s; (2)=Royal Coaches Most Vehicles were Released within 72 Hours or Remained for Over a Week in 2015 Of the nine tow vendors that provided this information, on average, 57 percent of vehicles they impounded were released within the first three days in 2015, but 32 percent remained on the lot for seven days or more. Exhibit 3.5: Volume of Vehicles Towed by Days before Release, 2015 Days before Vehicle Release City and Towing Vendor 1 day 2 days 3 days 4 days 5 days 6 days 7 days 7+ days Total Baldwin Park: Royal Coaches 931 322 225 109 79 41 27 814 2,548 Beverly Hills: Tip Top 445 35 8 - - - - 2 490 Glendale: Gay's 283 232 115 91 63 37 34 179 1,034 Glendora: Jan’s 65 29 46 35 30 21 20 127 373 Irwindale: Jan’s 48 28 14 7 5 1 5 68 176 Irwindale: Royal Coaches 64 17 8 8 10 4 5 57 173 Montebello: Helms & Hill 240 264 144 4 48 24 48 600 1,372 West Covina: Royal Coaches 173 65 48 34 36 16 14 217 603 Whittier: Hadley 73 82 54 39 36 29 17 13 343 Totals 2,322 1,074 662 327 307 173 170 2,077 7,112 Percentage 33% 15% 9% 5% 4% 2% 2% 29% 100% Grouped Percentages 57% 10% 32% Source: Review of Civil Grand Jury towing vendor surveys Note: The following towing vendors have not completed their surveys: Freddie Mac from El Monte; Gay’s, Monterey, and Crescenta Valley from Glendale; HP Tow from Huntington Park; Black and White from San Fernando; and Bob & Dave’s from Whittier. Bryant’s and B&H from Inglewood completed their surveys, but reported that this information is not tracked. The Civil Grand Jury’s survey to cities included the same question to delineate the volume of tows by the number of days before release, but only three cities (Beverly Hills, Irwindale, Whittier) provided this data while the other nine reported that this information is not tracked. Fees for a Regular Vehicle can Range From $228 to $494 for One Day of Storage Since most towed vehicles are released within the first three days of storage, but nearly a third of vehicles remain in storage for over a week, cost estimates for releasing a regular vehicle are provided in Exhibit 3.6. This exhibit is for informational purposes only as each city may charge additional fees depending on the car size, purposes of tow or impoundment, and if the lien sale process had begun. As can be seen in the illustration in Exhibit 3.6, total fees for vehicles retrieved after one day can range from a low of $228 in Glendale to a high of $494, or over twice as much, in Baldwin Park. Median fees after one day are $347. Vehicles retrieved after seven days would face median fees of $659, ranging from a low of $450 in Glendale to a high of $818 in Baldwin Park, or 82 percent more. Exhibit 3.6: Current Estimated Costs to Release a Regular Vehicle City Tow Daily Cities Release 1 Day 2 Days 3 Days 7 Days 15 Days 30 Days Fee2 Storage2 Fee1 Baldwin Park $245.00 $195 $54 $494 $548 $602 $818 $1,250 $2,060 Beverly Hills $117.00 $160 $42 $319 $361 $403 $571 $907 $1,537 El Monte $120.00 $205 $60 $385 $445 $505 $745 $1,225 $2,125 Glendale $72.00 $118.50 $37 $228 $265 $302 $450 $746 $1,301 Glendora $120.00 $175.00 $52.00 $347 $399 $451 $659 $1,075 $1,855 Huntington Park $108.23 $185 $60 $353 $413 $473 $713 $1,193 $2,093 Inglewood $150.00 $121.90 $33.00 $305 $338 $371 $503 $767 $1,262 Irwindale $50.00 $185 $53.00 $288 $341 $394 $606 $1,030 $1,825 Montebello $180.00 $154 $52 $386 $438 $490 $698 $1,114 $1,894 San Fernando $130.00 not provided n.a. n.a. n.a. n.a. n.a. n.a. West Covina $178.00 $195 $54 $427 $481 $535 $751 $1,183 $1,993 Whittier $121.00 $175 $45 $341 $386 $431 $611 $971 $1,646 Median $121 $175 $52 $347 $399 $451 $659 $1,075 $1,855 Minimum $50 $119 $33 $228 $265 $302 $450 $746 $1,262 Maximum $245 $205 $60 $494 $548 $602 $818 $1,250 $2,125 Source: Review of Civil Grand Jury city and towing vendor surveys 1Release fees in this analysis are for basic vehicle storage releases. The City of San Fernando charges a release fee and an administrative fee. 2Vendor tow and daily storage fees are current rates for regular vehicles. Cities with more than one vendor charging different tow and storage rates were averaged out for this cost analysis. Costs presented in Exhibit 3.6 above do not cover the spectrum of possible charges that may significantly increase or decrease the cost of releasing stored or impounded vehicles. Scenarios that may impact total release costs include: • Seven cities charge higher release fees for vehicles that were impounded as police holds, as noted in Exhibit 3.1. • If a lienholder has begun the lien sale process and notified persons of interest, an additional lien processing fee of $70 to $100 can be imposed after the first 72 hours (Vehicle Code 22651.07 and 22851.12). • As displayed in Exhibits 3.2 and 3.3, towing and daily storage fees can fluctuate depending on the size of the vehicle. • Cities and vendors may charge a gate fee up to one-half of the hourly tow rate charged for towing a vehicle if the vehicle is released outside normal business hours (Vehicle Code 22658(n)(2)(B)). • If an impounded vehicle has outstanding traffic or parking violation fees that have not been paid to the local authority, those fees may need to be paid as a condition of release (Vehicle Code 22651). Cities have a Statutory Obligation to Periodically Assess the Cost of Administration Vehicle Code Section 12110(b) allows cities to impose franchise fees on towing vendors that may not exceed the amount necessary to reimburse the public entity for its actual and reasonable costs incurred in connection with the towing program. Vehicle Code Section 22850.5 allows cities to impose fees on vehicle owners to recover administrative costs relating to the removal, impound, storage, or release of vehicles. Since there is no standardized structure for cities to manage and evaluate their towing vendors and towing related programs, cities have varying levels of oversight and involvement with their towing contractors. Consequently, as observed in our survey of twelve cities, the range of franchise and vehicle release fees varies greatly in form and value. Although cities are responsible for not charging franchise and release fees that exceed administrative costs, State law does not dictate how to calculate these fees, or how often the actual cost of administration should be assessed. The cost of administration heavily relies upon the time and cost of personnel involved in the towing program. Since public employee salaries and benefits typically escalate or change on an annual basis, the cost of service changes annually as well. Cities may not be recovering the full-cost of administration, or possibly overcharging towing vendors and towing service users. We highlight the following cities that have not updated their fees in several years and may not be recovering fees to cover the actual cost of service: • Inglewood still has not updated its franchise fee since at least 2010. • Irwindale has not updated its franchise fee since 2012. • Montebello has not updated its franchise see since 2012. • San Fernando has not updated its franchise fee since at least 2009. • West Covina has not updated its franchise fee since at least 2009. Cities should ensure compliance with the Vehicle Code by adopting best practices in establishing charges and fees that call for regular, periodic assessment of the cost of service justifying the fees.2 Recommendations: 3.1 All cities should adopt policies that require the cost of administering their towing programs to be reassessed on a periodic basis to ensure that franchise fee and administrative fees are not exceeding the cost of service. Since personnel costs typically adjust annually, this cost assessment should be conducted at least once every four years, the average base term of towing contracts in the survey. 3.2 All cities should annually review their city and tow contractor fees charged to vehicle owners, including comparisons with other cities in Los Angeles County, to assess and justify the amounts charged, considering the potential hardship on their citizens relative to the policy objectives of 2 Government Finance Officers Association. Best Practice: Establishing Government Charges and Fees. February 2014 26 the fees such as deterring certain types of behavior as well as considering the fairness of the fees being charged relative to other jurisdictions. 27
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  Ethics and Transparency  Gifts provided by towing vendors or their employees to designated city officials must be disclosed in those officials’ statements of economic interests. However, gift reporting requirements can be avoided if gifts are provided to city employees who are not designated officials, city departments, or city related organizations, like labor unions, employee associations, or professional associations.  Six of the twelve cities surveyed for this investigation indicated that their towing vendors provided in-kind services and gifts outside of their contract requirements. The vendors’ donations and services typically included free meals at public safety checkpoints and community meetings, sponsorships for luncheons and athletic events, and supporting community events.  Of the surveyed cities, only two cities maintain policies regulating or prohibiting towing vendors from selling auctioned lien vehicles to city officials or city agencies; five cities maintain policies regulating or prohibiting the city from contracting with vendors that are owned by city employees. One city has a policy regulating or prohibiting the city from contracting with vendors who employ relatives of city officials.  Police department personnel are heavily involved in the contracting process as nine of the twelve cities include the police department in making an official recommendation for the towing contract award. Single departments, usually the police departments, were found to be solely responsible for a number of the key stages in the tow vendor procurement processes. In conjunction with the observation that only three cities provided documentation of their towing proposal evaluations, there are opportunities for city employees involved in the procurement process to benefit from gifts and services of interested parties and not be subject to financial disclosure.  There have been several instances of impropriety involving towing vendors providing in-kind services and donations to government officials and employees in Los Angeles County in recent years. Cities have on obligation to mitigate fraud and abuse by adopting and enforcing conflict of interest policies, enhancing the competitive bidding process to include more stakeholders documenting proposal evaluations, and increasing reporting requirements for gifts and services provided by towing vendors. Financial Interest Disclosure Laws California Government Code Sections 87200 – 87210 require that certain public officials at the state and local level disclose their financial interests and abstain from making decisions that result in personal gain and that may be considered conflicts of interest. Public officials include candidates running for office, elected officials, city managers, city attorneys, and other public administrators who manage and make 28 decisions on the use of public resources. Government Code Sections 87300 – 87314 require local governments to adopt local conflict of interest codes that designate officials and employees who must disclose their financial interests. These designated employees must file annual statements of economic interests either with the California Fair Political Practices Commission and/or the local filing officer, usually the City Clerk. Financial interests include income, investments, equity in property and businesses, and gifts. Aggregate gifts from a single source totaling $50 or more in one year must be disclosed in the statement of economic interests, although designated officials cannot accept more than $4701 annually from that source. It is important to note that such gift limitations do not apply to campaign contributions, which have different limitations depending on state or local campaign finance laws. Financial Interest and Gift Disclosure Requirements Can Be Avoided by Providing Gifts to Non Designated Officials Gifts provided by towing vendors or their employees to designated city officials must be disclosed in those officials’ statements of economic interests. However, gift reporting requirements can be avoided if gifts are provided to city employees who are not designated officials, city departments, or city related organizations, like labor unions, employee associations, or professional associations. Of the twelve cities surveyed, six cities indicated that their towing vendors provided services and gifts in addition to support requirements in their contracts. Those cities include: • Baldwin Park: The towing vendor for this city donated $1,750 in 2014, and $2,400 in 2015 to support the police officer’s association in an athletic competition, and for providing bikes and food at community events. • Beverly Hills: The towing vendor spent $1,000 a year in 2014 and 2015 on biannual lunches for the police department. The vendor also provides two wrecked cars for the City’s annual “Every 15 Minutes” campaign to raise awareness about drunk driving. • Huntington Park: The prior towing vendor occasionally provided food for police officers stationed at public safety checkpoints, and coffee and pastries for community meetings. The city does not track, and consequently did not report, the value of these gifts in 2014 and 2015. • Irwindale: The City of Irwindale reported that one of its tow contractors, Royal Coaches, provided the City with donations and contributions in the form of $10,000 in 2014 and $4,860 in 2015 for the Library Foundation, 4th of July Fireworks, Music in the Park, Senior Center Thanksgiving dinner, and targeted tutoring at the Library. • San Fernando: The towing vendor reportedly purchases tables for Police Advisory luncheons; however, the value of these purchases was not reported by the city in 2014 and 2015. • West Covina: The City of West Covina reported that it did not know if its tow vendor, Royal Coaches, had provided any services, materials or donations to the City. However, the tow 1 Gift limits adjust with inflation every odd year, the most recent adjustment increasing from $460 to $470 for January 2, 2017 through December 31, 2018. 29 vendor reported donations and contributions for civic and City activities in the amounts of $6,074.58 and $1,307.54 in 2014 and 2015, respectively. Seven of the twelve cities indicated that the towing vendors provide free support services including towing of city vehicles, lending of lights for road incidents, and road clean up; however, these services are stipulated in each respective city’s towing contract. These six cities are: Baldwin Park, Beverly Hills, Glendora, Huntington Park, Irwindale, San Fernando, and West Covina. These services do not benefit particular individuals and are common contractual agreements. Most Cities Surveyed Do Not Maintain Specific Policies Addressing Potential Conflicts of Interest with Towing Vendors Since State financial disclosure laws apply to specific designated officials, another way for cities to mitigate conflicts of interest is to adopt and enforce local policies that prohibit all city employees from using their position of influence for personal gain. Of the surveyed cities, only two cities, Glendale and West Covina, maintain policies regulating or prohibiting towing vendors from selling auctioned lien vehicles to city officials or city agencies. Only five of the 12 cities maintain policies regulating or prohibiting the city from contracting with vendors that are owned by city employees: Baldwin Park, Beverly Hills, Glendale, Glendora, and Whittier. Finally, only one city, Glendora, has a policy regulating or prohibiting the city from contracting with vendors who employ relatives of city officials. Exhibit 4.1 below provides a summary of policies maintained by each city. Exhibit 4.1: Select Conflict of Interest Policies in the Twelve Surveyed Cities Policies in Place for: Prohibiting City from Auctioning City Contracts Contracting with Vehicles to City with Businesses Businesses Officials/ Owned by City Employing City City Agencies Employees Official Relatives Baldwin Park  Beverly Hills  El Monte Glendale   Glendora   Huntington Park Inglewood Irwindale Montebello San Fernando West Covina  Whittier  TOTAL 2 5 1 Source: City responses to the Civil Grand Jury survey In their survey responses, the cities of El Monte, Huntington Park, Irwindale, and Montebello reported that they do not maintain city or departmental policies specifically addressing the three areas above; 30 however, each of their towing contracts contain a brief, general “Conflict of Interest” clause wherein the vendor must acknowledge that no city officials’ or employees’ financial interests will be served by the contract award. Whittier’s towing contract also contains a similar clause in addition to their policies. Procurement of Tow Vendor Services were Controlled by the Police or Single Departments in a Number of Cities, Increasing the Risk of Conflicts of Interest Eleven of the twelve cities surveyed issued Requests for Proposals (RFPs) for towing services in recent years. In those eleven cities, the police department or another individual department, rather than a consortium of city departments and stakeholders, controlled key aspects of those towing vendor procurement processes. In six of the cities, for example, a single department, usually the police department, prepared the RFP. In four cities, a single department evaluated proposals and in nine cities, a single department prepared the recommendation for contract award for approval by the City Council. In six of the nine surveyed cities, the single department preparing the contract award recommendation was the police department. The final contract award decision was made by the City Council in every city. A summary of staff involved in the procurement process is summarized in Exhibit 4.2. Exhibit 4.2: Distribution of Responsibility for Towing Vendor Selection Processes in the Twelve Surveyed Cities Final City RFP Preparation Proposal Evaluation Recommendation Decision Baldwin Park Public Works Public Works Public Works City Council Beverly Hills Police Police Police City Council Committee: Finance, Police, Committee: Finance, Public Works, Police, Public Works, El Monte Administration Administration City Manager City Council Committee: Finance, Committee: Finance, Glendale Police Public Works, Police Public Works, Police City Council Glendora Police Police, City Manager Police, City Manager City Council Huntington Park Police Police Police City Council Purchasing/Dept Purchasing and City Council Inglewood* Staff Departmental Staff Police and Police Irwindale Police City Staff Committee City Staff Committee City Council Purchasing and Departmental Purchasing and Montebello Staff Departmental Staff City Manager City Council Police/Stakeholder San Fernando Police Committee Police City Council Purchasing and Departmental West Covina Staff Police Police City Council Whittier* None None Police City Council Single Dept. 6 4 7 n.a. Source: City responses to the Civil Grand Jury survey * The City of Inglewood does not award towing franchise agreements, but issues towing business permits to participate in the city’s pool of towing referrals. The City of Whittier does not issue an RFP for towing services 31 Having more parties involved in the procurement process reduces the chances of conflicts of interest, particularly in cases where bidding vendors have provided or might provide in-kind services or gifts to a city department, such as the police department. Involving representatives of other departments that would not be conducting business with the vendor would provide more assurance of the procurement process being objective and free of conflict of interest. As highlighted earlier, four cities indicated in their surveys that their towing vendors provided some form of in-kind services or gifts outside their required contractual arrangements. These services were often in the form of meals and sponsorships for police related activities. Since these services and gifts were not directed toward specific designated officials, these gifts have not been prior reported or disclosed. The lack of gift reporting requirements for non-designated officials creates opportunity for towing contractors to curry favor from police and other city personnel involved in the procurement process. For example, staff involved in evaluating proposals may favor contractors who continue to periodically cater meals for their departments. In addition, a police chief or city manager may also favor a contractor who provides meals and sponsorships that support their staff. In either circumstance, gifts delivered in such a manner can continue to be provided without being disclosed in the surveyed cities. Proposal Evaluation Documentation is Scarce As part of the Civil Grand Jury’s survey, the twelve cities were asked to indicate whether 20 different measures or criteria are used during the evaluation of towing vendor proposals, to indicate if other criteria is used, or to provide documentation of their proposal evaluations. The criteria provided in the survey was as follows. Respondents were asked to indicate which of the criteria they included in their tow vendor proposal evaluations. i Management qualifications ii. Company and/or employee safety records iii. Company employee training record and approach iv. Customer service approach and record v. Customer/public complaints filed a. >>Citizen complaint record b. >>Customer/public complaints on social media viii. Damage claim procedures (e.g., arbitration must be used) ix. Civil suits/claims x. Facility assessment (cleanliness, professionalism): a >>Office b >>Vehicle storage area c >>Area for police holds d. >>Area for trucks xv. Prior experience in tow/impound/salvage business 32 xvi. References xvii. Financial stability/viability xviii. Prior violations of current agreement xvix. Prior violations of any agreements with other cities xx. Background check results: Previous felony convictions Other convictions xxi. Other (specify) Exhibit 4.3 presents survey responses indicating which evaluation criteria they used to assess tow vendor proposals received. The exhibit also presents which respondent cities provided documentation of their bidder evaluations. As can be seen, only three cities provided documentation of their scoring process (Beverly Hills, Glendale, Irwindale) and it is therefore assumed that the other cities did not document their evaluation process. Exhibit 4.3: City Responses to Evaluation Criteria City Survey Evaluation Criteria Selected Evaluation Documentation Provided? Other: Storage yard location (other Baldwin Park bidders disqualified due to this) No Facility assessments (office, storage, police hold), references, Beverly Hills financial stability, prior violations. Yes: Provided proposal scoring notes El Monte Used all criteria listed in survey No Yes: 2016 scoring sheets on qualifications of personnel, service requirements, facility and equipment requirements, prior experience, Glendale None - alternate documentation references, and financial viability. Glendora Used all criteria listed in survey No Referenced factors in RFP on firm experience, inventory of equipment and facilities, policies and Huntington protocols, insurance coverage, claims, training, and Park None - alternate documentation financial viability Inglewood Used all criteria listed in survey No Yes: 2011 interview assessments provided with ratings on appearance, community involvement, compliance with city requirements, and motivation Irwindale None - alternate documentation to serve Montebello None No Used all criteria in survey except San Fernando customer complaints, claims/suits No West Covina None No Whittier None No Source: City responses to the Civil Grand Jury survey 33 With only three cities maintaining records of their towing vendor proposal evaluations, there is additional risk that, even when steering committees were created for the tow vendor procurements, employees involved in the procurement process could influence vendor recommendations without empirical evidence demonstrating that a recommended vendor’s proposal and performance exceeds other bidders. All cities should adopt scoring templates for towing vendor bidders and maintain records of these completed forms to ensure that proposal evaluations are conducted in a fair and unbiased manner. Cities are Obliged to Avoid and Reduce the Risk of Abuse in the Contracting Process Internal control best practices recommend that governments respond to risk by accepting, avoiding, reducing, or sharing risk.2 Since each city manages its own towing vendor, and contracting is the predominant method for providing towing services, governments can avoid and reduce the risk of fraud and abuse by establishing, monitoring, and enforcing policies that dissuade or prohibit city officials and employees from using their contract oversight authority or position in the procurement process for personal gain. In recent years, there have been several instances throughout the County of Los Angeles of towing vendors providing gifts, donations, and other financial interest to various government officials and employees, potentially undermining the public’s trust. Examples include: • Vernola’s Towing, a towing vendor for the Los Angeles County Sheriff, sold a stolen, high value vehicle to an Assistant Sheriff for a steeply discounted rate in 2014.3 • Royal Coaches donated $1,000 to the son of Irwindale’s former mayor while in the midst of contract negotiations with the City in 2012. Although the mayor recused himself from the contract award vote, the Fair Political Practices Commission imposed a $2,000 penalty against him after determining he had been inappropriately involved in discussions to break the single vendor service model that led to Royal Coaches being awarded a contract.4 • H.P. Tow was one of many businesses in contract with the City of Huntington Park that donated to a campaign committee for a candidate that did not run for office. This committee subsequently paid a Huntington Park councilwoman for “consulting services” stirring possible conflict of interest violations.5 H.P. Tow’s proprietor had also been involved in an FBI investigation for alleged bribery attempts of another Huntington Park councilmember,6 leading the city to terminate its contract as campaign contributions are prohibited in their service agreement under the clause that the vendor “shall make no payments for this contract and shall 2 Government Accountability Office. Standards for Internal Control in the Federal Government. September 2014. Chang, Cindy. “Top L.A. County sheriff’s official bought stolen Audi.” Los Angeles Times. October 2015. Favot, Sarah. “Former Irwindale mayor agrees to $2,000 fine for Political Reform Act violation.” Pasadena Star- News. August 2014. Elmahrek, Adam. “Huntington Park councilwoman’s consulting business raises questions about conflicts of interest.” Los Angeles Times. February 2017. Rubin, Joel. “The feds had an open-and-shut bribery case against 2 brothers. Then it unraveled.” Los Angeles Times. October 2016. 34 give no gifts to any of city’s officers or employees.” In addition, H.P. Tow may have also been in ongoing violation of this clause as the city reported that the vendor used to provide meals during public safety checkpoints. Recommendations: 4.1 All cities should incorporate a clause in their towing vendor contracts to require that all donations, gifts, and free services provided by the towing vendor outside of their service agreement to any city official or employee, city department, or city affiliated associations or events be documented and reported to the city. 4.2 All cities should adopt policies that prohibit the sale of lien vehicles to city entities or employees. 4.3 All cities should adopt policies that prohibit city employees from participating in the procurement or management of contracts of which employees may possess equity in a vendor or of which the vendor may be employing a relative of the city employee. 4.4 All cities should adopt policies that require more than only the police department or any other single department to be involved in the tow vendor procurement process: developing Requests for Proposals for towing and vendor services, evaluating proposals received, and recommending a contract award to the final decision maker. 4.5 All cities should adopt policies requiring that competitive bidding be employed in the selection of towing and impound services and that the City Council, and not a single employee such as the city manager, make the final decision on awarding contracts for tow and impound services. 4.6 All cities should adopt policies outlining specific criteria to be used for evaluating towing vendor proposals, create templates to be completed by individuals participating in the proposal evaluation, and maintain historical records to ensure fair and unbiased scoring in the evaluation process. 35
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  Public Information and Customer Service  Information for the public about surveyed cities tow and impound processes and fees is not well publicized in nearly all of the cities.  State law mandates that city tow and impound contract vendors post all storage fees and a Towing Fee and Access Notice at their facilities but display of this type of information is not statutorily required for the cities that contract with these vendors. Consequently, only three of the twelve surveyed cities report that they post information about their city’s towing and impound processes and practices at their police department or other city facilities which vehicle owners are likely to first visit when attempting to retrieve their vehicles. Similarly, only three cities reported having information available on a telephone hotline.  Seven cities report having a handout with tow and impound information and seven cities report posting information about their towing and impound processes and fees on their city websites. However, review of those websites showed that the information is limited and difficult to find. Rather than stand-alone website pages, partial information about city fees only and or contract tow vendor locations is often posted on police department or other subsidiary Frequently Asked Questions pages. In some cases, tow and impound fees are posted in city master fee schedules that are not associated with web pages with titles related to the police department or towed or impounded vehicles.  In spite of heavy concentrations of Hispanic or Latino residents in the majority of twelve surveyed cities, only three cities reported having Spanish versions of their handout. Only one city reported having Spanish versions of posters at their city facilities and only one city reported a Spanish version of their website.  Of the ten tow companies that provided responses to survey questions about their hours of operation, seven are open from 8 a.m. to 5 p.m. weekdays, making it difficult for individuals to get to the tow facilities to retrieve their vehicles before incurring multiple days’ storage fees and without taking time off from work. Two cities’ tow vendors, in Inglewood and Huntington Park, are open 24 hours a day, seven days a week, providing the greatest levels of access for vehicle owners. Seven of the vendors are open at least a least a half day on Saturday and five of the ten respondents are open on Sundays, which is beneficial to those with Monday-Friday daytime jobs. However, weekday evening hours provide the greatest arrangement to help vehicle owners minimize their storage fees. Public Information State law requires that law enforcement agency, cities, other government entities and tow yards, storage facilities, or impounding yards that charge for towing or storage, or both, post, in plain view of the public, a Towing Fees and Access Notice1 and, at all cashier stations, a full fee schedule2. The Towing Fees and Access Notice is to provide information about the towing and impound process, role of the city in establishing and verifying the rates charged, information about the vehicle owners’ rights, what to do in the event of a complaint or problem at the facility, liability issues, and other matters. While State law mandates disclosure of rate and other information by the tow and impound facility operators, it does not include comparable requirements for municipalities. In the case of the twelve cities surveyed for this investigation, the State noticing requirements apply to their tow company contractors, but not to the cities themselves. However, in the interest of providing customer service to the public and transparency in their operations, whether performed directly by the city or under their auspices through contract services, it behooves cities to provide information about the full costs and processes that owners will experience in attempting to retrieve their vehicles. Responses from the twelve surveyed Los Angeles County cities and a review of the cities’ websites found that the cities generally do not provide complete or useful information about the processes and full costs for owners to retrieve their vehicles. Tow and impound services are operated by contract vendors in all of the twelve cities and not the cities. Vehicles are most frequently towed and impounded as a result of actions taken by the cities’ police departments so, for the public, the experience with the tow company contactor is an extension of their experience with the cities. In spite of this, the cities provide scant information to the public on their websites or in posters and materials at police department or other city facilities. Of the twelve cities surveyed, seven reported having handouts available for the public, upon request, with information about the fees and towing and impound processes, but five of the cities do not have such a document available for the public upon request. Only three cities reported having signs or posters at their police departments or other city facilities describing the process and rates. Seven cities reported having pertinent information available on their website and three reported operating towing and impound telephone “hotlines”. Exhibit 5.1 summarizes the survey respondents’ forums for providing information to the public about towing and impound services and costs. California Vehicle Code 22651.07(a) 2 California Civil Code 3070(E) 37 Exhibit 5.1: Reported Vehicle Towing and Impound Information Sources in Twelve Surveyed Cities Posters/ signs at City Telephone City Website Handouts Facilities hotlines Baldwin Park   Beverly Hills    El Monte  Glendale  Glendora  Huntington Park   Inglewood    Irwindale   Montebello    San Fernando West Covina   Whittier TOTAL 7 7 3 3 Source: Civil Grand Jury survey of twelve Los Angeles County cities A review of the cities’ websites showed that the information is incomplete and would not provide much assistance to a member of the public trying to determine how to retrieve their impounded vehicle and how much retrieval is going to cost. None of the city’s websites provide comprehensive information, particularly in the area of fees for which the city websites only post city vehicle release or administrative fees, but not the contract tow vendor’s towing, storage and other fees. Vehicle owners in ten of the surveyed cities are required to pay city vehicle release or administrative fees in addition to tow, storage and other related fees charged by the tow vendor. Except for one city, Irwindale, only city fees are presented on city websites3. Tow, storage and other tow vendor fees are not presented on six of the seven cities that reported having pertinent information on their websites. Five cities have no information about towing and impound processes and fees whatsoever. Hours of operations In the survey of tow company vendors that contract with the twelve surveyed cities, various practices regarding business hours were reported. As shown in Exhibit 5.2, the most common practice for the contract vendors is to be open from 8 a.m. to 5 p.m. Monday-Friday. The vendors in two cities, Huntington Park and Inglewood, are open 24 hours a day, seven days a week and one city, Beverly Hills, is open from 7 a.m. to 7 p.m. seven days a week. The City of Irwindale reported in their survey response that they did not have tow and impound process and fee information on their website, but a review of the city’s website found such information on a page linked to the Police Department’s home webpage. Weekend hours vary, with two cities’ vendors open from 8 a.m. to 5 p.m. Saturdays and Sundays, one open from 7 a.m. to 7 p.m. all weekend, one open from 8 a.m. until 12 noon on Saturdays only, three vendors closed on Saturday and five closed on Sundays. For vehicle owners attempting to retrieve their vehicles, vendors open only from 8 a.m. to 5 p.m. Mondays through Fridays offer the least convenience, particularly for owners that cannot take time off from their jobs during that time or have commutes that make it difficult to get to the tow and impound facility during their hours of operation. The two cities with vendors operating 24 hours per day, Huntington Park and Inglewood, offer the greatest convenience to the public and provide an opportunity for vehicle owners to minimize their storage fees by being able to get to the facility during hours when they are not working. Similarly, the City of Beverly Hills vendor, open from 7 a.m. to 7 p.m. every day, provides more flexibility to vehicle owners. Weekend closures makes the vehicle retrieval process more burdensome for vehicle owners, particularly in the three cities that are only open from 8 a.m. to 5 p.m. Mondays through Fridays: Baldwin Park, Irwindale’s second of two vendors4, and West Covina. Exhibit 5.2: Business Hours Reported by Tow Vendors M-F Saturday Sunday City 24 hrs/day 8-5 7-7 24 hrs/day 8-5 7-7 8-12 Closed 24 hrs/day 8-5 7-7 Closed Baldwin Park    Beverly Hills    El Monte no response Glendale no response Glendora    Huntington Park    Inglewood (1)    Inglewood (2)    Irwindale (1)    Irwindale (2)    Montebello    San Fernando no response West Covina    Whittier no response TOTAL 2 7 1 2 2 1 2 3 2 2 1 5 Source: Grand Jury survey of tow and impound vendors in twelve Los Angeles County cities It should be noted that nine of the eleven contract tow vendors that responded to this survey question reported that they provide after-hours service, for a fee, if requested by the vehicle owners. The median fee reported for this service is $97. As with many aspects of the contract tow and impound services provided to the twelve surveyed cities, business operating hours vary substantially between the cities, making the same experience of retrieving a towed and impounded vehicle more burdensome in some communities compared to others. The cities do have the ability to improve the situation by requiring certain evening or weekend hours of operations for their vendors in their agreements. Vendors open from only 8 a.m. to 5 p.m. five days a 4 The City of Irwindale has two contract tow and impound vendors, one of which is open 24 hours a day, seven days a week and the other of which is open only from 8 a.m. to 5 p.m. weekdays. For vehicle owners whose vehicles are towed by the second vendor with more limited hours, the process of retrieval is much less convenient. 39 week are providing the lowest level of convenience to vehicle owners. The majority of respondents to this survey question demonstrated that many communities can and do provide a higher level of service to the public. Recommendations: 5.1 All cities should direct staff to expand the information on their city websites and in other hand out materials and posters available at city facilities to include webpages clearly designated for towed and impounded vehicle information, to include: all fees charged by both the city and the contract tow vendor(s), a description of the process for retrieving one’s vehicle, including obtaining a release from the city before visiting the tow vendor and paying their fees, and information about post storage hearing rights and fees for instances in which a vehicle owner believes their vehicles were improperly towed and/or stored. 5.2 The city councils of all cities should consider amendments to their agreements with their tow vendors to ensure that some hours of service are provided on weekday evenings and/or weekends to enable more vehicle owners to retrieve their vehicles and minimize storage fees incurred due to limited hours of tow and impound vendor operations. 40