PROPOSED CHANGES ARTICLE XI & TOW FEE STUDY San Antonio Police Department William P. McManus Chief of Police January 15, 2013 Marion Gee Asst. Director Finance Department

AGENDA Need for Changes Stakeholder Outreach Proposed Changes: – Language – Updates Tow Fee Study (Finance) Recommendation 2

Need for Changes Complaints from Residents and TDLR* – Inadequate signage – Lack of timely reporting – Improper towing practices – Excessive tow fees Tow Fee Study requested as allowed under State law 3 *Texas Department of Licensing and Registration

Stakeholder Outreach SAPD held meetings with towing industry representatives for feedback on changes – December 19, SAPD met with the President of the San Antonio Towing Association – January 8, 2013 – January 10, 2013 Provided Drafts of Proposed Ordinance Reviewed Proposed Changes Considered Comments and Concerns 4

PROPOSED CHANGES ARTICLE XI San Antonio Police Department William P. McManus Chief of Police January 15, 2013

Notification Time Limits Current Standard – Report tow to SAPD within 2 hours of removal Proposed Changes – Report tow to SAPD within 45 minutes of removal Protects the owner from improper towing practices Prevents waste of SAPD resources 6

Signage Proposed Changes – Added language requiring additional signage for properties with large or ambiguous entrances – Removed prohibition of property owner to receive signage from contracted towing company 7

Penalties Proposed Changes – Change from “Each day is a separate offense…” to “Each violation is a separate offense.” – Fines updated for consistency with current misdemeanor penalties 8

Drop Fees Proposed Changes – Added clause limiting the “drop fee” to no more than half the maximum tow fee 9 Still on the Property Fully Hooked Up for Tow Tow Truck Operator Requirement YesNoRelease vehicle for free Yes Advise Owner of drop fee NoYesDrop fee not applicable

Other Proposed Changes Process to dispose unclaimed vehicles Acknowledgement of State rules and regulations SAPD will utilize Companies will provide information on how to file complaints Personal property must be released 10

TOW FEE STUDY San Antonio Finance Department Marion Gee Asst. Director Finance Department

Current Non-Consent Towing Fee Ordinance (August 22, 2002) established the current fee schedule: 1.$85.00 for vehicles no longer than 20-feet or wider than 7-feet (light duty) 2.$ for vehicles longer than 20-feet, but does not exceed 40- feet or is not longer than 20-feet, but is wider than 7-feet (medium duty) 3.$ for any vehicle or combination vehicle longer than 40-feet long, regardless of width (heavy duty) Drop Fee – if the owner or operator of a vehicle which is parked in violation of this code or state law arrives before the vehicle is removed from the property, a towing company may agree to release the vehicle at the scene for a fee not to exceed the maximum fee for a non-consent tow

Request For Financial Data SAPD received a letter, dated March 9, 2012, requesting a towing fee study – SAPD responded with letter, dated April 23, 2012, requesting financial data from tow operator (via The Francis Law Firm) City Manager ’ s Office sent letter, dated July 13, 2012, to 23 towing companies requesting financial data – Letter was sent to President of the San Antonio Towing Association City Manager ’ s Office sent second letter, dated August 29, 2012, to 23 the same towing companies requesting financial data, in addition, other data – Letter also was sent to President of the San Antonio Towing Association Received very little response from the industry – One company submitted their financial data Roadside Recovery Specialists, Inc./Bexar Towing No subsequent responses submitted

Public Utilities Analysis Staff did not receive a representative amount of financial data from the towing industry so staff had to rely on other sources of information: – Morningside Research & Consulting study conducted on behalf of the Texas Department of Licensing and Regulation (May 2010) Contains recommended rates for light, medium, & heavy duty non-consent tows based on 2008/2009 data for five geographic zones within Texas – IBISWorld Industry Report 48841: Automobile Towing in the US, dated August 2012 Contains cost structure information for the U.S. towing industry

Rate Calculation IBISWorld Cost Structure Analysis – IBISWorld provided independent analysis on the cost structure of the towing industry IBISWorld StructureIndustry Costs Profit3.50% Wages41.50% Purchases (includes fuel)22.40% Depreciation4.40% Marketing1.20% Rent & Utilities6.00% Other21.00% %

Rate Calculation

Summary of Results 9.00% Profit added to adjusted rate Rates are “all inclusive”, meaning no other fees (e.g. dollies) will be added to proposed fee Rates above are rounded to the nearest whole number Current Max FeeProposed Max FeeVariance% Increase Light Tow$85$177$92108% Medium Tow$125$196$7156% Heavy Tow$300$602$302101%

Consultant Validation Released informal Non-Consent Towing Fee Study Professional Evaluation RFP on August 29, 2012 Scope – Part A: Evaluate City ’ s methodologies, results, and recommendations Two proposals received on September 14, 2012 – Dale Biosso & Associates Consulting – Reimherr Professional Business Consulting Awarded To: Dale Biosso & Associates Consulting Pricing: $8,900

Consultant Validation Consultant recommended the use of more appropriate local index factors which Public Utilities included in its calculations Consultant’s calculations match those of Public Utilities Consultant recommended the calculation of local tow fee rates but concluded that given the absence of financial data, the methodology used by Public Utilities was reasonable.

Comparison to Other Cities

Future Adjustments Options 1.Periodic adjustments Utilize the same inflation indexes that were calculated for the adjustment Utilize CPI’s Transportation Index (Houston- Brazoria-Galveston) inflation adjustment

Tow Fee Study Procedure The current ordinance is silent on this point Proposed Changes – Added clause to allow a tow fee study to be requested every four (4) years – Study requires a $5,000 deposit – CoSA has 120 days to complete after deposit and financial records have been received – The Finance Department will determine the methodology and records required 22

Recommendations Recommend approval of ordinance changes to full City Council on January 31, 2013 Adopt the Tow Fee Study conducted by the Finance Department 23

THANK YOU San Antonio Police Department William P. McManus Chief of Police January 15, 2013 Marion Gee Asst. Director Finance Department

Unclaimed Vehicles Current Language Unclaimed vehicles shall be disposed of in the manner described in Article a, Texas Vehicle Storage Facility Act. Proposed Changes “Unclaimed vehicles may be sold at a public auction by an auctioneer licensed by the Texas Department of Licensing and Registration.” 25

Inspections Proposed Changes – Drop clause “Adopt rules and regulations as necessary for proper administration and enforcement” – Replace with acknowledgement of State rules and regulations SAPD will utilize 26

Information (to Owner) Proposed Changes – Require towing companies to provide information about how to file complaints 27

Personal Property The current ordinance is silent on this point Proposed Changes – Vehicle storage facilities must release private property (items not affixed to the vehicle) to the vehicle’s owner/operator – This is required regardless of payment for the release of the vehicle 28

Records Retention Proposed Changes Include a retention requirement of two (2) years on all records, receipts, etc. 29

NON-CONSENT TOWING STUDY (Back-up Slides) Public Safety Council Committee January 15, 2013

Texas Department of Licensing and Regulation (TDLR) and Morningside Towing Study Section Fees for Nonconsent Tows; Refunds – A license or permit holder may not charge a fee for a nonconsent tow that is greater than: 1.The fee for a nonconsent tow established under Section ; or 2.A fee for a nonconsent tow authorized by a political subdivision. – Maximum Allowable 1.$250 for Light Duty Tow 2.$350 for Medium Duty Tow 3.$450 per unit or a maximum of $900 for a Heavy Duty Tow Morningside Research Consulting ’ s Towing Study 1.$ for Light Duty Tow 2.$ for Medium Duty Tow 3.$ for Heavy Duty Tow

Public Utilities Analysis If a reasonable sample of requested financial data was received from the tow truck companies: – Weighted average cost of expenses Average for each cost category to yield a “ weight ” or percentage of total costs Adjust the weights by changes in inflation – Average cost per tow Average the costs for each expense category for all of the tow companies Average the total number of tows per company Calculate a cost per tow plus a profit margin

Other Tow Rate Analysis Adjustment with current rate ($85.00) as a base – Utilized the Houston-Galveston-Brazoria Transportation Index as an inflation adjustment from 2002 to 2013 – Adjustment with 9.00% profit margin Light Duty Tow = $ Medium Duty Tow = $ Heavy Duty Tow = $ TDLR Occupational Code/Morningside Study – Morningside's base with indirect costs plus Houston-Galveston-Brazoria Transportation Index as an inflation adjustment from 2002 to 2013 – Adjustment with 9.00% profit margin Light Duty Tow = $ Medium Duty Tow = $ Heavy Duty Tow = $ Average of large Texas Cities survey – Cities included Dallas, Austin, Ft. Worth and Houston Light Duty Tow = $ Medium Duty Tow = $ Heavy Duty Tow = $382.67

Rate Calculation

Tow Operator ’ s Questions Phone Calls – 7/16/12 – Call from Atlas Towing (Olga): wanted clarification on the financial information being requested – 7/17/12 – Call from Ron ’ s Towing (Ronald Alcorta): stated does not do non-consent tows but would submit his financial information – 8/30/12 – Call from Bolado ’ s Towing (David Bolado): stated does not do non-consent tows and does not want another letter sent to him – 9/7/12 – Call from Mobile City Wrecker: stated they needed letter resent/faxed. Faxed letter Return To Sender Mailings – San Antonio Rescue and Recovery Towing (resent 7/31/12) – Monster Recovery (no address on TDLR site) – Ace Auto (no address on TDLR site)