The URL can be used to link to this page

Home My WebLink About04-26-1993 Item #20�r BY THE Cf� CO: `. ,IL CQTY: F i ":.r f ;?.-'�!'�.7 ; Or Iy_E��Q_.�.__....y_ APR 2 6 imQ AP it 12, 1993 TO: MAYOR AND CITY COUNCIL MEMBERS FROM: Glen Everroad, Revenue Manager . ,.r(" 'r T/^ Til AT TT SUBJECT: PROPOSED AMENDMENTS TO MUNICIP RELATING TO TOW TRUCKS AND REQUEST FOR RATt INCREASE Background Newport Beach Municipal Code Chapters 5.13 and 5.15 regulate tow truck and official police tow truck operations, respectively. There are fifteen (15) companies licensed by the City that are subject to the requirements of Chapter 5.13. Rates charged by tow truck companies are regulated, and drivers are required to obtain a permit from the City. Two official police tow truck operators are subject to the requirements of both Chapters 5.13 and 5.15, and operate under a two year contractual agreement as provided by Section 5.15.080. Each year, staff investigates applications for one of the two official police tow truck contracts. Nearly each year, staff investigates and reports to Council on a request for rate increase for official police tow truck services. Section 5.13.140 regulates tow truck service rates, and requires City Council approval of any change in rates. In May of last year both official police tow truck operators submitted requests to revise the rates charged for official police tow truck services. Staff was directed to prepare revisions to the Ordinance, including the establishment of the franchise fee, and submit to Council the request for revision of the rates with the amendments to the ordinance. The attached proposed amendments are the result of several meetings conducted with the official police tow truck operators, the Police Department and review of the practices of other Orange County cities and the California Highway Patrol. The Budget Committee reviewed the proposed amendments on March 17 and April 7. Proposed Amendments Sections 5.13.070 and 5.15.070 set forth the factors Council shall consider in determining whether to issue a Certificate of Public Convenience and Necessity for tow truck operations. The proposed amendments would include compliance with Municipal and State law requirements in those factors to be considered by the City Council. Section 5.13.100 requires the Police Department to annually inspect every tow truck operated in the City. A similar inspection is also performed by the California Highway Patrol each year. Proposed amendments to Section 5.13.100 would permit the City to accept evidence of satisfactory completion of the Highway Patrol inspection, and prevent duplication of the process by our Police Department. C j Tow Truck Amendments Page Two Sections 5.13.150 and 5.15.120 require tow truck drivers to obtain a permit to operate a tow truck in the City, and provide the basis for issuance and denial. Permits are currently issued ad infinitum. These Sections have been amended to include administrative details such as the issuance of temporary permits, conditions for renewal and revocation, and procedures to appeal revocation or suspension of a permit. The City Manager, or his delegate, has been named to replace the Chief of Police as the issuing authority, more accurately reflecting the practice since 1986. Driver's permits will be renewed annually (as is the requirement for taxi drivers) to ensure that tow truck drivers continue to meet the qualifications to operate a tow trucks within the City. For uniformity, Section 5.15.040 has been amended to include tow rate services included in the Official Police Tow Truck Agreement not listed in the Ordinance. Two revisions to Section 5.15.080 will significantly reduce the amount of staff time, and cost to the City, dedicated annually to review requests for rate increases and applications for police tow truck services. The proposed amendments will provide for an automatic rate increase limited to the Consumer Price Index. The two Official Police Tow Truck Agreements would expire at the same time, and the term of the agreements would be extended from two (2) years to five (5) years. A new section (5.15.095) has been added to establish a franchise fee of ten percent (10%) of the gross receipts derived from official police tow truck services provided in the City. Proceeds from vehicles sold at lien sale would be excluded. The Police Department generates approximately 4,500 calls for official police tow truck service each year. It is estimated that approximately $45,000 in additional revenue would be generated from the proposed franchise fee annually. The standards for tow truck equipment have been consolidated in Section 5.15.100. Official police tow truck companies would be permitted to respond flat bed tow trucks to requests for service, but would only be able to charge flat bed fees when they were specifically requested. The proposed revisions to Section 5.15.110 reduce the business hours during the slower season (September 15 through June 15), while restricting the imposition of after hours release fees to their current hours (7:00 p.m to 7:00 a.m). Vehicle storage space requirements have been quantified in terms of square footage as opposed to the number of vehicles. Tow Truck Amendments Page Three ' Request For Rate Revision The official police tow truck operators have requested to increase rates in ten categories and decrease rates in four categories. Three categories are proposed to remain unchanged. A survey of the rates authorized by nine other Orange County cities (Santa Ana, Irvine, Tustin, Costa Mesa, Huntington Beach, Fountain Valley, Garden Grove, Anaheim and Orange) that regulate tow truck rates was conducted. A listing of those rates which have been requested to be increased is attached. Attachment (1) lists the currently authorized rate, the rate requested by the official police tow truck operators, the average rate from the nine city survey and the rate recommended by staff. The survey of other Orange County cities has demonstrated some disparity in this City's rates and the average in the County. Since 1984, City Councils have approved seven requests for tow rate increases totalling 58%, while the Consumer Price Index for the same period increased 43%. The rates recommended by staff will bring this City's rates in line with the average in the County, and is recommended on the basis that Council adopt the proposed amendments limiting increases in official police tow truck operator's rates to the Consumer Price Index for the next five years. The rates recommended for approval have been reviewed and supported by the Police Department and Budget Committee. The Budget Committee recommended the addition of a police release fee to offset police department costs associated with releasing impounded vehicles. This fee category has been added to the official police tow truck rates. A statement from the Police Department supporting the rates has been attached. Recommendation Staff believes the proposed amendments will significantly reduce the City's costs in administration of official police tow truck operations, and improves the level of service to the Police Department and the public. The rates recommended will maintain a reasonable degree of competition while providing a fair return on the investment of the official police tow truck operators, and would establish the foundation from which automatic C.P.I. increases for the next five years should be based. Attachment (1) Vftw k OFFICIAL POLICE TOW TRUCK RATES Current Requested County Recommended Police Release Fee $25.00 Rate Rate Average Rate Storage/Impound -Day $65.00 $75.00 $73.59 $80.00 Storage/Impound -Night $65.00 $75.00 $73.59 $80.00 Accident/Impound -Day/Night $65.00 $75.00 $73.59 $80.00 Heavy Duty/Flatbed Tow $85.00 $85.00 $89.89 $85.00 Storage Car -Outside $13.00 $20.00 $17.50 $20.00 Car -Inside $18.00 $25.00 $23.56 $23.50 Truck -Outside $18.00 $25.00 $25.00 $22.50 Truck -Inside $21.00 $30.00 $28.23 $28.00 Hourly Rate $65.00 $75.00 $72.67 $75.00 After Hours Release Rate $24.00 $25.00 $28.34 $27.00 Police Release Fee $25.00