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HomeMy WebLinkAbout14-Police Department ORIGINAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Keith L. Kilmer, Subject: A RESOLUTION OF THE MAYOR Chief of Police AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE Dept: Police Department ESTABLISHMENT OF A CITY-OWNED VEHICLE IMPOUND FACILITY TO BE Date: July 12, 2010 OPERATED AND MAINTAINED BY THE CITY OF SAN BERNARDINO POLICE DEPARTMENT M/CC Meeting Date: s/16/2010 Synopsis of Previous Council Action: 3-4-09 Concept presented to the Ways&Means Committee and directed to return with a comprehensive business plan. 7-22-09 Business plan presented to Ways&Means Committee. 8-5-09 Ways&Means Committee recommended the item be forwarded to the Common Council for consideration. 8-17-09 Motion to approve a Police Operated Impound Facility was considered,but not approved by the Mayor and Common Council. 7-6-10 Council directed staff to update the business plan for FY 2010/2011. Recommended Motion: 1. Adopt resolution;and 2. Add one lieutenant position,Range P4,$11,011;and 3. Establish classification of Police Impound Facility Attendant,Range 1380,$2,954-$3,591;and 4. Approve the job description for the position of Police Impound Facility Attendant and authorize the hiring of two Police Impound Facility Attendants;and 5. Authorize the Human Resources Department to update Resolution 97-244 and 2008-33;and 6. Subject to the completion of a public hearing on any new or increased revenue sources and fees, authorize the Director of Finance to amend the FY 2010/11 budget and add the Police Department operated Impound Facility as outlined in this Staff Report and Business KEITH L. KILMER,CHIEF OF POLICE Contact person: Lieutenant Raymond King Phone: 384-5604 Supporting data attached: Yes Ward: All FUNDING REQUIREMENTS: Amount: Finance Council Notes: t, .rrr-+ � a� PcAr!so on/ z-za-Jr �4Gca�oj- 14N - ��vr s �3l - _ �2 �a3- � 9• - Agenda Item No � f CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT Approval of the Police Department operated Impound Facility as outlined in the attached Business Plan. BACKGROUND The Police Department previously prepared a Business Plan to implement a Police Department operated Impound Facility for the FY 2009/2010 budget. Following presentations to the impacted tow carriers and the Ways and Means Committee the Business Plan was submitted to the Council on August 17, 2009; however, the Business Plan was not approved at that time. Although forwarded to the full Council from the Ways and Means Committee, the item was rejected by the Council at the August 17, 2009 Council meeting. On July 6, 2010, the Council requested the Police Department to update the Business Plan for FY 2010/2011. During the initial analysis in 2009 the concept was evaluated by both the Police Department and Facilities Management from a program management perspective. The cost difference between the two analysis conducted by separate departments was marginal. Due to security concerns and operational control the City Manager and Police Department mutually agreed that Police Department management of the Impound Facility was the best approach. City staff members have evaluated several similar programs in several other local communities and have developed a best practice approach for the City of San Bernardino. Other communities operating similar programs include the City of Colton, City of Claremont, City of Upland, City of Placentia, and the City of Long Beach. Highlights of this Business Plan (Exhibit A) include the following: • This Business Plan maintains a relationship with all of the existing tow carriers that are currently on the City's tow rotation. These independent tow carriers will continue to perform all of the towing services they currently provide for the City under each respective Towing Service Agreement("TSA"). • Each tow carrier pays a flat-rate franchise fee under the guidelines of the TSA. This fee will be reduced for each tow carrier by using a 10% model based on the gross tow revenue generated through City business. • The City will procure property for use as an Impound Facility and maintain possession of all "impounded" vehicles. These are vehicles held for a legal reason such as driving with a suspended driver's license or when a driver was never issued a driver's license or driving a vehicle with registration that has been expired in excess of six months. The tow carriers will maintain possession of all "stored" vehicles. Police Officers will direct the tow carrier to the appropriate facility when towing a vehicle whether for storage or for impound purposes. • A detailed revenue and expense plan, which includes initial expenses, 6 month and full year estimates, and a summary of the costs that will be recovered by the General Fund from the Police Department operated Impound Facility. • A comparison of towing, storage, impound and lien-sale operations as they currently exist and under the recommended proposal. This Police Department Business Plan will require the addition of new positions to complement existing Police Department staff. The attached resolution amends each existing Towing Service Agreement ("TSA") and modifies the method of calculation of the franchise fee to be equal to ten percent (10%) of the City generated gross revenues from towing for both storage and impounds and the storage costs of vehicles other than impounded vehicles. The Resolution also authorizes the execution of a lease agreement with the San Bernardino International Airport Authority ("SBIAA") for an initial site of 3.5 acres on the recently paved lot covering the former NAFB landfill on Third Street west of Alabama Avenue. It is intended that this action will fully implement all steps required for the City to proceed with the initiation of the Police Department operated Impound Facility by January 1, 2011, or sooner. TOW SERVICE AGREEMENT CHANGES: In 2005, the existing Tow Service Agreement ("TSA") between the City of San Bernardino and the six tow carriers that perform towing operations for the Police Department was approved by the City Council (Resolution 2005-286). This current agreement updated the previous agreement from 1999 (Resolution 99-86). In 2008 (Resolution 2008-347), the current agreements were amended to include a minor language changes. In 2010 (Resolution 2010-28) further amendments were adopted to set the current franchise fee of$31,689 per month divided among the current tow carriers on the Police Department rotation. In preparation for this Police Impound Facility operation, there was a full review of the TSA by Police Department staff members and legal counsel. Changes have been noted that will accommodate the program and cause for a new agreement to be established through the recommended amendments, subject to the approval of such changes and amendments by the City Attorney. The following is a synopsis of the significant changes that are recommended: • Requirement that the towing carrier photograph vehicles when taking possession in order to document the condition of the vehicle. This is a mechanism being put into place to effectively deal with claims of damage and theft. • Language that will allow for impounded vehicles to be delivered to the Police Impound Facility while stored vehicles continue to be maintained by the towing carrier. This rule is a general guideline as final authority on where a vehicle is to be taken to will rest with the impounding/towing officer. • Amending the franchise fee that is currently paid by the tow carriers. The new language will establish a franchise fee of 10% of the base gross tow revenue generated through City business. This language will include a requirement that each carrier provide an itemized list of each vehicle and applicable charges related to that vehicle for each service call. • Establishing language that will allow the City to collect tow charges for vehicles in the Police Impound Facility inventory and reimburse the tow carrier for those charges when collected by the City. PERSONNEL CONSIDERATIONS The implementation of the Business Plan requires the addition on one new lieutenant position and the establishment of a new classification entitled Police Impound Facility Attendant (see attachment A — Class Specification — Police Impound Facility Attend). The necessary actions suggested in this staff report are in the form of the motions and all actions required to staff the Police Impound Facility and to establish the necessary personnel positions and budget adjustments. ESTABLISHMENT OF DAILY IMPOUND RATE: The Resolution also declares the intent of the City to establish an interim daily impound rate of $40.00 per day per vehicle, subject to a later conducted public hearing on the matter for the storage of impounded vehicles at the Police Impound Facility. The City is presently in the process of updating the entire City fee structure through a consultant to take action on this update by the end of the year 2010. This interim daily impound rate will be re-evaluated during the upcoming Citywide fee study. FINANCIAL IMPACT The Business Plan includes six months of estimated revenues and expenditures for the Impound Facility. If the Business Plan for the Impound Facility is approved, the attached resolution and amendment to the TSA fully implements the impound yard program including a modification of the franchise fee to be paid as set forth in the Business Plan. This Business Plan proposal has a positive financial impact on the City's General Fund in that many existing City expenses related to the privately operated impound yards and the impounding of vehicles are paid by the General Fund without the present ability to recover but a minor portion of the actual City General Fund costs. It is estimated that by establishing the Police Department operated Impound Facility, approximately $425,851 can be recouped for the City General Fund in FY 2010/2011 and an estimated minimum of$1,000,000 annually thereafter as summarized in Attachment B. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEOA) The San Bernardino International Airport Authority received approval from State and federal regulatory agencies for its 2007 Closure Plan/Post Closure Plan which outlined the remediation activities at the former landfill site. The SBIAA later prepared an addendum to that plan to allow an end use as a parking facility. On March 25, 2009, the SBIAA adopted a Mitigated Negative Declaration and approved the Landfill Parking Facility Project. The use of a portion of the site for the Police Department Impound Facility is within the scope of the addendum. RECOMMENDATION 1. Adopt resolution; and 2. Add one lieutenant Position, Range P4, $11,011; and 3. Establish classification of Police Impound Facility Attendant, Range 1380, $2,954- $3,591; and 4. Approve the job description for the position of Police Impound Facility Attendant and authorize the hiring of two (2) Police Impound Facility Attendants; and 5. Authorize the Human Resources Department to update Resolution 97-244 and 2008-33; and 6. Subject to the completion of a public hearing on any new or increased revenue sources and fees, authorize the Director of Finance to amend the FY 2010/11 budget to add the Police Department operated Impound Facility as outlined in this Staff Report and Business Plan. ATTACHMENTS: Attachment A—Job Summary—Class Specification Attachment B—Cost Recovery Summary Sheet Resolution; Exhibit"A"—Business Plan Attachment 1 —Map Attachment 2 —Financial Projections and Narrative Attachment 3 —Current Structure vs. Recommended Structure Summary Staff Re port ATTACHMENT A to p Class Code: M/CC Date Adopted: NNW Signature: City of San Bernardino Director,Human Resources Bargaining Unit: CLASS SPECIFICATION Police Impound Facility Attendant EEOC Job Category:Semi-skilled JOB SUMMARY Under general supervision,performs a variety of routine to semi-skilled duties in data and document entry, inventory control, forklift operation, minor preventative vehicle maintenance, and performs related duties as assigned. DISTINGUISHING CHARACTERISTICS Police Impound Facility Attendants perform a variety of routine to semi-skilled duties for the Police Department. Work may require moving vehicles outside of the facility for weekly public auctions. ESSENTIAL DUTIES AND RESPONSIBILITIES The duties listed below are intended only as illustrations of the various types of work that may be performed. The omission of specific statements of duties does not exclude them from the position if the work is similar, related or a logical assignment to this class. 1. Operates equipment and tools, including a forklift, air compressor and battery charger/jump- start box. 2. Receives impounded vehicles, documents the vehicles overall condition, and transfers the vehicle to a location inside the facility. 3. Enters data and downloads photographs into an inventory control computer system. 4. Maintains control over the facility during business operating hours. 5. Retrieves and releases impounded vehicles to the vehicle owner once authorization to release has been granted. 6. Follows safe work practices and procedures in performing assigned duties. QUALIFICATIONS Knowledge of: 1. Basic operation of computer operating systems and programs. 2. Basic operation and preventative maintenance of vehicles (i.e. maintaining tire pressure and charging battery systems). 3. Safe working practices and safety equipment related to the work. I ATTACHMENT A to Staff Report Ability to: 1. Operate basic computer operating systems and programs. 2. Conduct preventative maintenance to impounded vehicles; such as recharging batteries and inflating tires. 3. Understand and follow oral and written instructions. 4. Keep basic logs and records. 5. Operate a forklift system 6. Establish and maintain effective relationships with those encountered in the course of work. Education,Training and Experience: A typical way of obtaining the knowledge, skills and abilities outlined above is graduation from high school or G.E.D. equivalent, and experience in vehicle and equipment servicing. Additional training may be substituted for the required experience on a year-for-year basis. Licenses; Certificates; Special Requirements: A valid California driver's license and the ability to maintain insurability under the City's vehicle insurance policy. A valid forklift operating certificate. PHYSICAL DEMANDS The physical demands described here are representative of those that must be met by an employee to successfully perform the essential functions of this class. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. While performing the duties of this job,the employee is frequently required to use hands to finger, handle, feel or operate objects, tools or controls; and reach with hands and arms. The employee is occasionally required to climb or balance, stoop,kneel, crouch or crawl,walk and sit. The employee is regularly required to talk and hear conversations, equipment operating and warning sounds. The employee must frequently lift and/or move up to 100 pounds. Specific vision abilities required by this job include close vision, color vision and the ability to adjust focus. WORK ENVIRONMENT The work environment characteristics described here are representative of those an employee encounters while performing the essential functions of this class. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. The employee works in typical outdoor storage facility conditions and the noise level is sometimes loud. The employee works near moving mechanical parts and can be exposed to fumes, particles and toxic or caustic chemicals. The employee frequently works in outside weather conditions and is exposed to wet, hot and/or humid conditions. TESTING STANDARDS ATTACHMENT B to Staff Report Police Operated Impound Facility Fiscal Year 2010-2011 COST RECOVERY SUMMARY SHEET CURRENT EXISTING OPERATIONS: Tow Franchise Fees Paid to City $ 380,268 City Operated Impound Facility Benefit First 6-months Existing Resources Shifted to Impound Facility Operation $ 537,260 Tow Franchise Fees Lowered for Tow Companies (111,409) Total Net Benefit to City $ 425,851 City Operated Impound Facility Benefit 12 - months Existing Resources Shifted to Impound Facility Operation $ 1,319,770 Tow Franchise Fees Lowered for Tow Companies (222,818) Total Net Benefit to City $ 1,096,952 I RESOLUTION NO. 2010- 2 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 3 SAN BERNARDINO AUTHORIZING THE ESTABLISHMENT OF A CITY- OWNED VEHICLE IMPOUND FACILITY TO BE OPERATED AND 4 MAINTAINED BY THE CITY OF SAN BERNARDINO POLICE DEPARTMENT r AND REVISING TOW CARRIER FRANCHISE FEES FOR TOW SERVICE CARRIERS 6 WHEREAS, the City of San Bernardino (the "City") needs to maintain an orderly and 7 8 efficient system for City-initiated towing of vehicles within the City; and 9 WHEREAS,the City desires to construct and maintain its own impound facility(the"City 10 Impound Facility")to take advantage of various economic and efficiency benefits associated with 11 such action as well as to streamline the impound process; and 12 WHEREAS,multiple towing carriers("Tow Carriers")have entered into valid agreements 13 with the City(the"Tow Carrier Agreements") and currently store and impound vehicles at those 14 facilities of the Tow Carriers as provided in such Tow Carrier Agreements; and 15 16 WHEREAS,City initiated tows for"impounded"vehicles are distinguished from tows for 17 "stored" vehicles by the state law requirements for impound for violations of the Vehicle Code; 18 and 19 WHEREAS,the City now seeks to place the responsibilities of operating and maintaining 20 the City-owned Impound Facility with the San Bernardino Police Department while utilizing the 21 services of the Tow Carders for transport of impounded vehicles to the City Impound Facility as 22 well as for continuing storage of non-impounded vehicles which latter obligation shall remain that 23 24 of the Tow Carriers; and 25 WHEREAS,such changes include a revision of the existing franchise fee to a franchise fee 26 which shall be calculated upon ten percent(10%)of gross receipts generated by each Tow Carrier 27 from all City generated business whether for storage or the impound of vehicles; and 28 1 1 WHEREAS,the Mayor and Common Council find that,based upon evidence in the staff 2 report, Business Plan and supporting financial documents, the franchise fee does not exceed the 3 amount necessary to reimburse the City for its actual and reasonable costs (including direct and 4 5 indirect overhead) incurred in connection with the towing program under the Tow Carrier 6 Agreements. 7 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY 8 OF SAN BERNARDINO, CALIFORNIA, RESOLVE AND ORDER AS FOLLOWS: 9 Section 1. Recitals. The recitals set out above are true and correct. 10 Section 2. Authority to Establish a City-Operated Impound Facility. The Mayor and 11 12 Common Council of the City of San Bernardino hereby: (i) authorize the Police Department and 13 the City Manager to establish a Police Department Vehicle Impound Facility pursuant to the 14 Business Plan, attached hereto marked Exhibit "A" and incorporated herein as though fully set 15 forth in length;(ii)further authorize the City Manager,Police Department and City Attorney or his 16 designee to negotiate the terms of a lease agreement for the property identified or other suitable 17 location provided that the lease is with the San Bernardino International Airport Authority 18 ("SBIAA") or the Inland Valley Development Agency("IVDA") and the term of the lease does 19 20 not exceed five(5)years with an initial rental rate not to exceed $0.03 per square foot per month 21 for a minimum property size of 3 %z acres located within the City of San Bernardino; (iii)the City 22 Manager is further authorized to enter into a standard form security agreement with the IVDA for 23 the provision of security services to the City Impound Facility during nonbusiness hours of such 24 facility;and(iii)the City Manager and staff hereby are directed to take all necessary actions and to 25 prepare and bring back to Council for approval the necessary documentation to implement the 26 27 Business Plan in Exhibit"A"if and to the extent such further actions are necessary. 28 2 1 Section 3. bnpound Procedures. As set out in Exhibit"A",all impounds shall be handled 2 through the SBPD and at the direction of the SBPD and any transport of vehicles for impound shall 3 4 be performed by an authorized Tow Carrier with a current Agreement for Tow Services with the 5 City. 6 Section 4. Franchise Fees. As allowed by the Vehicle Code,the City hereby declares the 7 intent to establish a franchise fee in the amount of ten percent(10%)of the gross receipts of each 8 Towing Carrier under the Agreement for Tow Services,as gross receipts are defined therein for all 9 City generated business of the Tow Carriers,with such franchise fee amount to be established at a 10 later when amendments to the Tow Services Agreements are approved by the Mayor and Common 11 Council. 12 13 Section 5. Establishment of Interim Storage Fee. The Mayor and Common Council hereby 14 farther declare the intent to establish an interim storage fee, subject the conduct of a subsequent 15 public hearing on such matter, as the same shall be applied to the City Impound Facility for the 16 impound of vehicles at a rate equal o $40.00 per day(the "Interim Storage Fee"),whether for an 17 entire day or y or any portion of a day,which Interim Storage Fee shall only be in force and effect 18 19 until such time as the Mayor and Common Council adopt an amendment to the City Fee Schedule 20 as applicable to all City fees. 21 Section 6. Effective Date. This Resolution shall take effect in the manner as provided in 22 the City Charter. 23 24 25 26 27 28 3 1 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 2 BERNARDINO AUTHORIZING THE ESTABLISHMENT OF A CITY-OWNED VEHICLE IMPOUND FACILITY TO BE OPERATED AND MAINTAINED BY THE 3 CITY OF SAN BERNARDINO POLICE DEPARTMENT AND REVISING TOW CARRIER FRANCHISE FEES FOR TOW SERVICE CARRIERS 4 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 6 Common Council of the City of San Bernardino at a meeting thereof,held on the 7 day of , 2010 by the following vote, to wit: 8 9 Council Members: Ayes Nays Abstain Absent 10 MARQUEZ _ DESJARDINS _ 11 BRINKER 12 SHORETT _ 13 KELLEY _ 14 JOHNSON _ 15 MC CAMMACK _ 16 17 Rachel G. Clark, City Clerk 18 19 The foregoing Resolution is hereby approved this day of 2010. 20 21 Patrick J. Morris, Mayor City of San Bernardino 22 Approved as to Form: 23 By: 24 James F. Penman, City Attorney 25 26 27 28 4 i EXHIBIT "A" to Resolution CITY OF SAN BERNARDINO POLICE-OPERATED VEHICLE IMPOUND FACILITY BUSINESS PLAN Introduction/Overview: The Police Department is proposing a concept that involves operating an impound facility to maintain vehicles that have been impounded by the Police Department. This program would allow the City of San Bernardino to control the operations of the facility and capture revenue generated by the daily impound of vehicles to cover a portion of police related expenses to impound vehicles. These vehicles are currently being impounded by the Police Department but stored at one of the six tow rotation carriers contracted with the City. There are a number of communities in Southern California that operate similar programs. The City of Long Beach operates a full-service operation that involves actual towing of vehicles. The cities of Colton, Upland, Claremont and Placentia are a few of the local entities that operate a facility similar to the model that is being proposed here. The City of San Bernardino has a Tow Service Agreement (TSA) with six private tow carriers located within the City to provide towing and impound services for all City departments. Under the current program, the carriers collectively pay a franchise fee that totals just over $31,600 per month. The carriers are on a call rotation basis, respond to all towing requests by officers (approximately 6,000—9,000 calls for service each year). All vehicles that are towed are taken to the private storage yards maintained by each carrier. This proposal will modify the existing process for impounded vehicles but continue to utilize our existing carriers for towing services. Under the plan, tow carriers will deliver "impounded" vehicles to the Police operated facility and maintain possession of all other towed and stored vehicles. The current franchise fee will be adjusted in a manner that should benefit the tow carriers to account for program changes. During last year's evaluation for this project a property at the corner of Hallmark and Shenandoah was deemed the most appropriate and suitable location for this operation. However, this year there were other properties that became available, including some owned and controlled by EDA and IVDA. The preferred location at this time is determined to be property controlled by IVDA at the east end of the airport off Third Street. Attached as Attachment 1 to this Business Plan is a vicinity map and aerial photograph illustrating the location of this site. The current condition and status of this property would allow for operations to commence very quickly. The property would require the addition of a mobile office building for operations but the overall work required is minimal. This operation would require additional staff(one police lieutenant and two tow yard attendants). City employees will manage the inventory of vehicles in the possession of the City. A private vendor will be utilized for the lien process of vehicles that will be required to be sold during a weekly auction that will be held at the impound facility. If passed, City Finance staff will incorporate this plan into the proposed FY 10/11 budget. The proposal has an anticipated start date of no later than January 1, 2011 and could be operational as early as October 2010. Revenue figures will vary depending upon the actual implementation date. Attachment 2 of this Business Plan outlines the financial projections of this proposed Police Impound Facility. Police Department Management: Because of the nature of the operation, this facility will fall within the scope of responsibility of the Traffic Unit. Police Department personnel will manage the day-to-day activities of the facility, maintain inventory control and handle the daily financial matters related to the operation. • This program calls for the addition of a Police Lieutenant to the Police Department staffing levels. The Traffic Unit is currently managed by a Lieutenant who also serves as the Patrol Support Commander with several other responsibilities. The Traffic Unit is an ancillary duty to that position. The addition of a lieutenant to specifically manage the Traffic Unit will provide for a more efficient management structure and span of control. This new position will have management responsibility of all traffic operations to include field work, administrative functions, the Red Light Camera program, Special Events, (permits) as well as the impound facility. • Current Traffic Unit supervision is handled by two police sergeants and a civilian supervisor. Daily supervision of this facility will fall under the umbrella of their duties and responsibilities. • Administrative duties related to impounded vehicle releases will be handled by the existing staff in the traffic unit. There is a possibility that additional clerical positions will be needed in the future if the program grows beyond the anticipated numbers indicated in this proposal. • It will be necessary to create a new classification of"Police Impound Facility Attendant." The budget for this program calls for hiring two full-time employees for this position. These positions will handle the physical workload associated with the facility. Examples of these duties include movement of impounded vehicles, inventory and property control, as well as duties associated with the auction program. • Full time personnel will be at the facility during regular business hours (Monday — Friday). During the off hours, the facility will be staffed with a security presence from IVDA. These guards will handle security at the facility to protect the inventory and allow tow drivers to deliver vehicles during off business hours. Incorporated into this plan is funding to provide additional security resources for this facility. The existing IVDA security guards are current or retired professional peace officers and a separate agreement will be entered for this service. Receiving Vehicles: The facility will contain vehicles that are "impounded", which are mostly vehicles that are being operated on the road with expired registration in excess of six months, as well as vehicles that are driven by an unlicensed driver. A majority of impounds are for a 30-day period due to a driver never being licensed or driving on a suspended license(CVC 14602.6a). There are other reasons for impounds, such as street racing violations or the vehicle has evidentiary value. Other vehicles that are towed by officers are classified as "stored", which can include vehicles involved in traffic accidents, blocking traffic and deemed a traffic hazard and long-term parking violations (excess of 72 hours). The proposed facility will not normally take "stored" vehicles, which will be handled by the existing tow operators. A police officer that makes a determination that a vehicle is to be towed will request a tow from the list of rotation tow carriers contracted by the City through the TSA. If the vehicle is to be stored by the officer, then the tow carrier driver will deliver the vehicle to the facility maintained by the tow carrier business. If the vehicle is going to be impounded in accordance with the law, then the officer will direct the tow carrier driver to deliver the vehicle to the City's impound facility. During regular business hours, the facility will be staffed with civilian police employees that will accept the vehicle. During the hours that the facility is not staffed with full-time employees, the security presence from IVDA will staff the facility and allow tow drivers access to deliver the impounded vehicle. The City will establish a protocol for accepting vehicles into the facility's inventory. A computer-based tracking program will be purchased to manage the inventory and every vehicle will be photographed to document the condition of the vehicle when delivered to the facility. The photo documentation system will be used to provide a level of protection for the City against claims of theft and damage. Vehicle Release Procedures: The Police Department already has a system in place for vehicle release procedures. Persons that have had their vehicle impounded currently go to the Central Police Station to obtain a release. The person is required to pay the administrative release fee; they are provided with the necessary release paperwork and then are directed to one of the six tow carrier yards to retrieve their vehicle. The existing system will be slightly modified in that the person arriving at the Police Station will also be required to pay the entire amount due for the release of a vehicle in the City's inventory, including the addition of the towing bill, storage fees and lien fees, if applicable. If the vehicle is located at the City's impound facility, the person will be directed to the facility to retrieve their vehicle. Lien Process: There will be a need to start a lien process on many of the vehicles impounded. This process will typically be started after 72 hours of the impound hold if the owner has not retrieved the vehicle. This process may also be implemented on 30-day hold vehicles. The lien process will be contracted to an outside vendor. The use of an outside vendor will allow the City to free itself of the legal details of the process. The cost associated with the process will be passed along to the vehicle owner when the vehicle is retrieved. Starting the lien process is a legal requirement that will allow the City to dispose of vehicles the owners do not intend to claim from the impound process. The value of the vehicle determines the length of the lien process, which can be between 45 and 90 days. Anybody who has their vehicle impounded will have ample opportunity to retrieve their vehicle before the lien process is completed. Vehicles that are not retrieved by the owner will be sold through an auction process. Excess monies from the sales of vehicles will be returned to the DMV per State law. Auction Process: It is estimated that the City will sell in excess of 1,200 vehicles per year at an impound auction. These are vehicles that have been impounded by officers and never claimed by the owners after the legal hold period has passed. The City will maintain possession of these vehicles throughout the required impound period and until the legal time period has elapsed on the lien process. The vendor contracted for the lien process will notify the Police Department that all legal matters are resolved and advise us as to when the vehicle can be sold. The City will conduct a weekly auction open to the public at the impound facility site. Personnel from the City will conduct the auction. Policies and procedures will be established as to how the auction is to be conducted and who may or may not be prohibited from participating. For example, Police Department personnel will be prohibited from purchasing vehicles at the auction. Site Activity The City's impound facility will have a mobile office building to accommodate the employees assigned to work at the site. This building will house the Impound Lot Attendants. In terms of public access, this site will only be used for the retrieval of vehicles for persons claiming release of their vehicles, as well as the public auctions. It will not serve as a business office for public contact with the City or the Police Department. Site Location: The Police Department, with the assistance of the City Manager's office, Development Services and the Economic Development Agency, has evaluated several property options within the City of San Bernardino. It was determined after careful analysis that the requirements of the property should include the capacity to accommodate 400-600 vehicles, be approximately 3-6 acres in size and have an office facility on-site. We focused our efforts on areas that were zoned accordingly so as to allow for this use. As noted earlier, several potential locations were evaluated. A site that is currently available and ideal for this operation is a paved parking lot on East Third Street. Although situated on airport property, this site was formerly a landfill and was developed by IVDA for vehicle and commercial storage purposes; it is not critical to airport operations. This site is 20+ paved acres and already contains the necessary security in the form of protective walls, fencing and lighting. This location will allow for almost immediate use and will give us the ability to commence operations with minimal investment. Although we will only use a small portion of the available property, IVDA will allow for flexible usage in that we can start with a small parcel (3 %2 acres) and add additional space if capacity demands increase. There are no other tenants on the property at this time. In the event other tenants lease some of the available space it will become necessary for the City to erect portable security barriers to isolate the impounded vehicle inventory. It is recommended that the City purchase/lease a modular office building for staff use at the facility. The utilities necessary for this operation are available at this site. Power and limited data connectivity will be utilized. Sewer is currently not available but IVDA has indicated a desire to deliver sewer to the site if economically feasible. It is proposed that the San Bernardino International Airport Authority ("SBIAA") would enter into a lease for a term not to exceed five (5) years in duration for the initial 3 '/z acre parcel within the 20 acre paved site. The site could be expanded up to a total of 5 '/s acres in one (1) acre increments based upon option language to be contained in the lease to provide for such expansion at the option of the Police Department. The initial rental rate will be set at $0.03 per square foot per month payable monthly to SBIAA with standard annual increases commencing as of the second year. The lease would also allow for a termination at the option of the Police Department if and when a suitable long-term site were located. Although the property mentioned above has been identified as being preferred at this time it is important to note that this location will likely not be a permanent site for this operation. As this program moves forward in future years, it will be necessary for the City to evaluate other potential properties for long term/permanent use. Tow Carrier Impact: The City of San Bernardino has a Tow Service Agreement (TSA) with six carriers located in the City. These carriers are: Big Z Towing, Wilson Towing, Danny's Towing, Tri-City Towing, Hayes Towing and City Towing. However, only five of the six carriers are being amended and addressed at this time. Big Z Towing will not be a part of this action on the TSA and the City will then initiate a process to fill the sixth TSA position. Under the requirements set forth in the TSA, the carriers respond to all requests for tow services by the Police Department,the amount of vehicles towed annually has ranged from 6,000—9,000 calls for service in recent years. Of those totals, approximately 60% - 65% of the vehicles are considered"impounded,"meaning that the vehicle owner must satisfy some legal requirement to obtain a release for their vehicle. For instance, an owner with a vehicle impounded for expired registration in excess of six months will be required to pay the fees due to the Department of Motor Vehicles to bring the registration current and valid before an impound release will be granted. These are among the types of vehicles that will be delivered to the City impound facility. The remaining calls for service that the carriers receive from the Police Department (35%-40%) are stored vehicles or owner request tows. The carriers will maintain possession of these vehicles. Throughout the planning of this proposal, it has been the desire of the Police Department to create a system that will retain the current tow carriers to the maximum extent possible and continue to contract tow and storage services through the current carriers. This proposal continues the use of five of our current carriers to perform all towing operations generated by field and investigative operations of the Police Department. Under the proposed arrangement, carriers will be required to deliver specified vehicles to the Police Department facility (impounded vehicles) and continue to operate within their existing business model with the remainder of the vehicles towed. Storage fees that would be collected by the tow carriers for these impounded vehicles will now be retained by the City. However, the carrier will continue to realize all revenue from other towed and stored vehicles and will realize the towing fee for all vehicles delivered to the City's facility. Under the guidelines of the TSA, the tow carriers pay the City a franchise fee for performing towing services. Under the current plan that fee is a flat rate of $31,689 per month divided among the six carriers, or $5,281 each. This fee was established using a formula of$46.04 per vehicle that had been towed during a previous year's analysis. With the understanding that the lost revenue from the storage of vehicles impounded by the Police Department may impact the financials of each carrier, it is recommended that the franchise fee be adjusted. Therefore, it is recommended that the current flat rate be amended and a new franchise fee model of 10% of gross tow revenue generated through City business be adopted. This proposed franchise fee model will be more labor intensive, but it is believed that it will provide a more equitable business environment for the carriers. This plan would allow the carriers to pay a franchise fee that will be adjusted based upon their gross revenues each month and not be bound to a flat fee. The City may charge a franchise fee to recover actual and reasonable costs associated with the franchise program. This fee adjustment is similar to the fee structure adopted by the City of Colton. The functions of the impound facility operated by the Police Department will recover some of the costs in the existing program, and therefore it would be reasonable to alleviate some financial impact against the carriers. The existing TSA has been evaluated by the Police Department and suggested changes have been offered in the form of an amended agreement. This agreement is being submitted to the Mayor and Common Council for approval. The existing TSA with each tow carrier provides that their agreements are automatically amended when such amendments are approved by the Mayor and Common Council. Furthermore, these agreements contain a provision that allows either the tow carrier or the City to terminate the TSA on 30 days notice to the other party. Members of the Police Department, Development Services, Facilities Management, City Attorney and City Manager have met with the carriers to discuss their concerns. Collectively,the carriers have stated that this program will have a impact on their profits. The carriers have reported that approximately 45% of their gross revenues come from impound fees and taking this revenue from them will create a financial hardship. It is difficult for the City to be in a position to know exactly what the actual impact will be to the carriers. The concerns of each carrier have become part of the overall evaluation of this proposal. However, in the research conducted with other communities that have implemented this type of program, it was reported that the primary resistance to change would come from the existing carriers. In many of the cases, similar claims were made by carriers in other communities. We have not found a case of a tow carrier that could not sustain business operations in other communities after this type of operation was implemented. See Attachment 3 for a summary of the current compared to the proposed structure. F � , 1 ,• 1s k 9 i .« aA� Im rik a. o 4 �. T• M'AW y , MA r s �^ oFf i , I A'ffACHMEN"1'2 of Business Plan Police Operated Impound Facility-IVDA Site Fiscal Year 2010-2011 Based on projected start date 1/l/11 FY Estimated 2010-2011 Annual Budget REVENUE 850 General Impounds @ 5 days 170,000 340,000 599 Lien Sale Vehicles @$778 466,022 932,044 239 Early Releases @ 5 days 47,800 95,600 359 30-Day Impound Releases 430,800 861,600 1448 Tow Fees $185 1 267,880 535,760 1448 Lien Fees @$70 101,360 202,720 Total Revenue 1,483,862 2,967,724 NEW EXPENSES START UP Salaries/Benefits Paid During Set-Up 53,095 - - SalariesBenefits for Operation 148,786 297,572 Forklift Lease(eff. 12/1110 500 3,000 6,000 General Start Up Equipment 58,000 - - Propea Lease effective 10-1-10 9,400 28,200 56,400 Office Lease(eff. 12/1/10 1,200 3,600 7,200 Utilities(eff. 12/1/10 1,500 9,000 18,000 Other Operating Expenses(eff. 12/1110 6,000 12,000 Security-Off Hours 84,000 168,000 Set Aside Account - 60,000 120,000 2046 Tow Fees $185 378,510 757,020 2046 Lien Fees $70 - 143,220 286,580 Bad Debt/Uncollectible - 70,000 142,000 Total All New Expenses 123,695 934,316 1,870,772 Current Resources Shifted to Impound Fac Salaries/Benefits Paid During Set-Up 60,595 Salaries/OT/Benefits/Supplies/Equip for Operations 326,665 1,019,770 city Administrative Costs 10% 150,000 300,000 Loss in Franchise Fee (111,409) (222,818) Total Resources Shifted to Impound Fac 425,851 1,096,952 GRAND TOTAL NEW AND SHIFTED RESOURCES FOR IMPOUND FACILITY 1,483,862 2,967,724 ATTACHMENT 2 to Business Plan FY 2010/11 Budeet Narrative Revenue: Based on six month projected impounds. Estimated figures indicate there will be 850 general impounds and 1,197 30-day impounds. Of the 30-day impounds it is estimated that 599 vehicles will be sold through the lien process, 239 will be released early, and 359 will be claimed after the 30-day period. The proposed daily rate for the storage of impounded vehicles is $40 per day based on a cost analysis conducted by City staff. Tow Fees Collected— This is the estimated amount that will be collected through the program (later returned to the carriers under expenditures). Lien Fees Collected — This is the estimated amount that will be collected for lien services provided by an outside vendor(later returned under expenditures). New Expenses: Start-Up (One-Time Expenses) Salaries During Set-up — 1) Police lieutenant for three months @ $42,571 and 2) Impound Lot Attendant for one month @ $10,524 =$53,095 Forklift Lease—Delivery one month before operations = $500 General Start Up Equipment—Facility preparation and site readiness $15,000; Office equipment $15,000; Transport Trailer $3,000; Miscellaneous equipment $10,000; Eagle Claw system $3,000;Network system install $5,000; and DIMS Server$7,000= $58,000 Property Lease—Delivery two months before operation= $9,400 Office Lease—Delivery two months before operations =$1,200 Utilities—One month before operations = $1,500 Operational Costs (6 months)— These will become annual reoccurring costs Salaries During Operation — 1) Police lieutenant @ $85,182; 2) Impound Lot Attendants @ $63,604=$148,786 Forklift Lease - $500 per month=$3,000 Property Lease - $4,700 per month=$28,200 Office Lease- $600 per month effective =$3,600 Utilities—$1,500 per month=$9,000 Other Operating Expenses—Miscellaneous expenses @ $1,000 per month= $6,000 Off-Hour Security — Covers IVDA security guards staffing the facility during off hours = $84,000 Set-Aside Account—Site fund established for long-term infrastructure improvements. Tow Fees Paid — Payment to the tow carriers for services rendered. This number includes $267,880 from tow fees collected$110,630 from lien sold vehicles =$378,510 Lien Fees Paid— Payment to the vendor that will provide lien services. This number includes $101,360 from lien fees collected and $41,860 for lien sold vehicles =$143,220 Bad Debt/Uncollectible—This is an estimated figure. Impound Facility Recovery of City Costs: Salaries Paid During Set Up — Covers current City expenses incurred during the set-up process. All of these expenses are currently being paid from the General Fund. This includes portions of personnel salaries for two Police Lieutenants, a Traffic Sergeant, Public Safety IT Manager, and Administrative Analyst II. Salaries — Covers General Fund / Police Department expenses attributed to program operations and administrative management. City Administrative Costs — 10% of gross revenue to cover City administrative costs (City Manager, Facilities Management, Development Services, Finance, etc.). Loss of Franchise Fee — Covers the projected reduction in the Franchise Fee currently paid by the rotation tows. All revenues and expenses are estimates. ATTACHMENT 3 to Business Plan POLICE IMPOUND FACILITY CURRENT STRUCTURE vs. RECOMMENDED STRUCTURE Current Structure Recommended Structure Towing Services • 6 tow carriers. • Carriers will continue to perform • 6,000-9,000 vehicles towed all towing services. annually. • Annual revenue to reimburse • $185 initial towing fee per vehicle costs—$1M. (Average). Storage& Impounds • Carriers store/impound all • All impounds(approximately vehicles at their facilities. 4,000-6,000)go to city facility. • All stored vehicles(approx. 2,000 - 3,000)go to carriers'facilities. Lien Sales • Carriers lien sale unclaimed • City will assume lien sales of vehicles. unclaimed impounds. • Majority are 30-day impounds. • Carriers will continue to lien sale • Carriers claim that most are low unclaimed stored vehicles. value vehicles. • Financial impact to the carriers is unknown. Franchise Fee • $380,268 annual flat-rate fee. • Restructured to provide afee • Equally divided between carriers. reduction to carriers. • Based on 2009 tow data. • Adjusted monthly based on 109/o of gross revenue generated through City business. NOTE: The information above is based on Police Department data and does not include any financial information supplied by tow operators. I RESOLUTION NO. �r z A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE 3 CITY OF SAN BERNARDINO AUTHORIZING THE ESTABLISHMENT OF A CITY-OWNED VEHICLE IMPOUND FACILITY TO BE a OPERATED AND MAINTAINED BY THE CITY OF SAN BERNARDINO 5 POLICE DEPARTMENT 6 WHEREAS, the City of San Bernardino (the "City") needs to maintain an orderly and efficient system for City-initiated towing of vehicles within the City; and 8 i 9 WHEREAS,the City desires to construct and maintain its own impound facility (the 10 "City Impound Facility")to take advantage of various economic and efficiency benefits t t associated with such action as well as to streamline the impound process; and 12 WHEREAS, City initiated tows for"impounded" vehicles are distinguished from tows 13 for"stored" vehicles by the state law requirements for impound for violations of the Vehicle 14 15 Code; and 16 WHEREAS, the City now seeks to place the responsibilities of operating and maintaining 17 the City-owned Impound Facility with the San Bernardino Police Department. 18 NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF 19 zo SAN BERNARDINO, CALIFORNIA, RESOLVE AND ORDER AS FOLLOWS: 21 Section 1. Recitals. The recitals set out above are true and correct. zz Section 2. Authority to Establish a City-Operated Impound Facility. The Mayor an 23 Common Council of the City of San Bernardino hereby: (i) authorize the Police Department an 24 25 the City Manager to establish a Police Department Vehicle Impound Facility pursuant to those 26 portions of the Business Plan that are relevant thereto, attached hereto marked Exhibit "A" an 27 incorporated herein as though fully set forth in length; (ii) further authorize the City Manager, 028 Police Department and City Attorney or his designee to negotiate the terms of a lease agreement - 1 I for the property identified or other suitable location provided that the lease is with the San 2 Bernardino International Airport Authority ("SBIAA") or the Inland Valley Development 3 Agency ("IVDA") and the tern of the lease does not exceed five (5) years with an initial rental 4 rate not to exceed $0.03 per square foot per month for a minimum property p q p p p rty size of 3 '/z acre 5 located within the.City of San Bernardino; (iii) the City Manager is further authorized to enter 6 7 into a standard form security agreement with the IVDA for the provision of security services to 8 the City Impound Facility during non-business hours of such facility; and (iii) the City Manage 9 and staff hereby are directed to take all necessary actions and to prepare and bring back t 10 Council for approval the necessary documentation to implement the Business Plan in Exhibi u 12 "A" if and to the extent such further actions are necessary. 13 Section 3. Effective Date. This Resolution shall take effect in the manner as provided in 14 the City Charter. 16 17 i 18 19 20 21 22 23 24 25 26 27 © 28 _2 I A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE ESTABLISHMENT OF A CITY-OWNED VEHICLE 2 IMPOUND FACILITY TO BE OPERATED AND MAINTAINED BY THE CITY OF SAN BERNARDINO POLICE DEPARTMENT 3 a I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 Common Council of the City of San Bernardino at a meeting thereof,held on 6 the day of , 2010 by the following vote, to wit: 7 8 Council Members: Ayes Nays Abstain Absent 9 MARQUEZ 10 DESJARDINS II BRINKER — 12 SHORETT 13 KELLEY — 14 JOHNSON _ 15 MC CAMMACK 16 17 Rachel G. Clark, City Clerk IS The foregoing Resolution is hereby approved this day of 2010. 19 20 21 Patrick J. Morris, Mayor 22 Approved as to Form: City of San Bernardino 23 By: 2a Timothy J. Sabo 25 Special Counsel 26 27 Q28 -3 EXHIBIT"A" 2 3 City Impound Facility Business Plan 4 5 6 7 8 9 10 11 12 13 14 l 15 16 17 18 19 20 21 22 23 24 25 26 27 ® 28 -4 1 t i �j EXHIBIT "A" to Resolution CITY OF SAN BERNARDINO POLICE-OPERATED VEHICLE IMPOUND FACILITY BUSINESS PLAN Introduction/Overview: The Police Department is proposing a concept that involves operating an impound facility to maintain vehicles that have been impounded by the Police Department. This program would allow the City of San Bernardino to control the operations of the facility and capture revenue generated by the daily impound of vehicles to cover a portion of police related expenses to impound vehicles. These vehicles are currently being impounded by the Police Department but stored at one of the six tow rotation carriers contracted with the City. There are a number of communities in Southern California that operate similar programs. The City of Long Beach operates a full-service operation that involves actual towing of vehicles. The cities of Colton, Upland, Claremont and Placentia are a few of the local entities that operate a facility similar to the model that is being proposed here. The City of San Bernardino has a Tow Service Agreement (TSA) with six private tow carriers located within the City to provide towing and impound services for all City departments. Under the current program, the carriers collectively pay a franchise fee that totals just over $31,600 per month. The carriers are on a call rotation basis, respond to all towing requests by officers (approximately 6,000—9,000 calls for service each year). All vehicles that are towed are taken to the private storage yards maintained by each carrier. This proposal will modify the existing process for impounded vehicles but continue to utilize our existing carriers for towing services. Under the plan, tow carriers will deliver "impounded" vehicles to the Police operated facility and maintain possession of all other towed and stored vehicles. The current franchise fee will be adjusted in a manner that should benefit the tow carriers to account for program changes. During last year's evaluation for this project a property at the corner of Hallmark and Shenandoah was deemed the most appropriate and suitable location for this operation. However, this year there were other properties that became available, including some owned and controlled by EDA and IVDA. The preferred location at this time is determined to be property controlled by IVDA at the east end of the airport off Third Street. Attached as Attachment 1 to this Business Plan is a vicinity map and aerial photograph illustrating the location of this site. The current condition and status of this property would allow for operations to commence very quickly. The property would require the addition of a mobile office building for operations but the overall work required is minimal. This operation would require additional staff(one police lieutenant and two tow yard attendants). City employees will manage the inventory of vehicles in the possession of the City. A private vendor will be utilized for the lien process of vehicles that will be required to be sold during a weekly auction that will be held at the impound facility. If passed, City Finance staff will incorporate this plan into the proposed FY 10/11 budget. The proposal has an anticipated start date of no later than January 1, 2011 and could be operational as early as October 2010. Revenue figures will vary depending upon the actual implementation date. Attachment 2 of this Business Plan outlines the financial projections of this proposed Police Impound Facility. Police Department Management: Because of the nature of the operation, this facility will fall within the scope of responsibility of the Traffic Unit. Police Department personnel will manage the day-to-day activities of the facility, maintain inventory control and handle the daily financial matters related to the operation. • This program calls for the addition of a Police Lieutenant to the Police Department staffing levels. The Traffic Unit is currently managed by a Lieutenant who also serves as the Patrol Support Commander with several other responsibilities. The Traffic Unit is an ancillary duty to that position. The addition of a lieutenant to specifically manage the Traffic Unit will provide for a more efficient management structure and span of control. This new position will have management responsibility of all traffic operations to include field work, administrative functions, the Red Light Camera program, Special Events, (permits) as well as the impound facility. • Current Traffic Unit supervision is handled by two police sergeants and a civilian supervisor. Daily supervision of this facility will fall under the umbrella of their duties and responsibilities. • Administrative duties related to impounded vehicle releases will be handled by the existing staff in the traffic unit. There is a possibility that additional clerical positions will be needed in the future if the program grows beyond the anticipated numbers indicated in this proposal. • It will be necessary to create a new classification of"Police Impound Facility Attendant." The budget for this program calls for hiring two full-time employees for this position. These positions will handle the physical workload associated with the facility. Examples of these duties include movement of impounded vehicles, inventory and property control, as well as duties associated with the auction program. • Full time personnel will be at the facility during regular business hours (Monday — Friday). During the off hours, the facility will be staffed with a security presence from IVDA. These guards will handle security at the facility to protect the inventory and allow tow drivers to deliver vehicles during off business hours. Incorporated into this plan is funding to provide additional security resources for this facility. The existing IVDA security guards are current or retired professional peace officers and a separate agreement will be entered for this service. Receiving Vehicles: The facility will contain vehicles that are "impounded", which are mostly vehicles that are being operated on the road with expired registration in excess of six months, as well as vehicles that are driven by an unlicensed driver. A majority of impounds are for a 30-day period due to a driver never being licensed or driving on a suspended license (CVC 14602.6a). There are other reasons for impounds, such as street racing violations or the vehicle has evidentiary value. Other vehicles that are towed by officers are classified as "stored", which can include vehicles involved in traffic accidents, blocking traffic and deemed a traffic hazard and long-term parking violations (excess of 72 hours). The proposed facility will not normally take "stored" vehicles, which will be handled by the existing tow operators. A police officer that makes a determination that a vehicle is to be towed will request a tow from the list of rotation tow carriers contracted by the City through the TSA. If the vehicle is to be stored by the officer,then the tow carrier driver will deliver the vehicle to the facility maintained by the tow carrier business. If the vehicle is going to be impounded in accordance with the law, then the officer will direct the tow carrier driver to deliver the vehicle to the City's impound facility. During regular business hours, the facility will be staffed with civilian police employees that will accept the vehicle. During the hours that the facility is not staffed with full-time employees, the security presence from IVDA will staff the facility and allow tow drivers access to deliver the impounded vehicle. The City will establish a protocol for accepting vehicles into the facility's inventory. A computer-based tracking program will be purchased to manage the inventory and every vehicle will be photographed to document the condition of the vehicle when delivered to the facility. The photo documentation system will be used to provide a level of protection for the City against claims of theft and damage. Vehicle Release Procedures: The Police Department already has a system in place for vehicle release procedures. Persons that have had their vehicle impounded currently go to the Central Police Station to obtain a release. The person is required to pay the administrative release fee; they are provided with the necessary release paperwork and then are directed to one of the six tow carver yards to retrieve their vehicle. The existing system will be slightly modified in that the person arriving at the Police Station will also be required to pay the entire amount due for the release of a vehicle in the City's inventory, including the addition of the towing bill, storage fees and lien fees, if applicable. If the vehicle is located at the City's impound facility, the person will be directed to the facility to retrieve their vehicle. Lien Process: There will be a need to start a lien process on many of the vehicles impounded. This process will typically be started after 72 hours of the impound hold if the owner has not retrieved the vehicle. This process may also be implemented on 30-day hold vehicles. The lien process will be contracted to an outside vendor. The use of an outside vendor will allow the City to free itself of the legal details of the process. The cost associated with the process will be passed along to the vehicle owner when the vehicle is retrieved. Starting the lien process is a legal requirement that will allow the City to dispose of vehicles the owners do not intend to claim from the impound process. The value of the vehicle determines the length of the lien process, which can be between 45 and 90 days. Anybody who has their vehicle impounded will have ample opportunity to retrieve their vehicle before the lien process is completed. Vehicles that are not retrieved by the owner will be sold through an auction process. Excess monies from the sales of vehicles will be returned to the DMV per State law. Auction Process: It is estimated that the City will sell in excess of 1,200 vehicles per year at an impound auction. These are vehicles that have been impounded by officers and never claimed by the owners after the legal hold period has passed. The City will maintain possession of these vehicles throughout the required impound period and until the legal time period has elapsed on the lien process. The vendor contracted for the lien process will notify the Police Department that all legal matters are resolved and advise us as to when the vehicle can be sold. The City will conduct a weekly auction open to the public at the impound facility site. Personnel from the City will conduct the auction. Policies and procedures will be established as to how the auction is to be conducted and who may or may not be prohibited from participating. For example, Police Department personnel will be prohibited from purchasing vehicles at the auction. Site Activity: The City's impound facility will have a mobile office building to accommodate the employees assigned to work at the site. This building will house the Impound Lot Attendants. In terms of public access, this site will only be used for the retrieval of vehicles for persons claiming release of their vehicles, as well as the public auctions. It will not serve as a business office for public contact with the City or the Police Department. Site Location: The Police Department, with the assistance of the City Manager's office, Development Services and the Economic Development Agency, has evaluated several property options within the City of San Bernardino. It was determined after careful analysis that the requirements of the property should include 'the capacity to accommodate 400-600 vehicles, be approximately 3-6 acres in size and have an office facility on-site. We focused our efforts on areas that were zoned accordingly so as to allow for this use. As noted earlier, several potential locations were evaluated. A site that is currently available and ideal for this operation is a paved parking lot on East Third Street. Although situated on airport property, this site was formerly a landfill and was developed by IVDA for vehicle and commercial storage purposes; it is not critical to airport operations. This site is 20+ paved acres and already contains the necessary security in the form of protective walls, fencing and lighting. This location will allow for almost immediate use and will give us the ability to commence operations with minimal investment. Although we will only use a small portion of the available property, rVDA will allow for flexible usage in that we can start with a small parcel (3 `/z acres) and add additional space if capacity demands increase. There are no other tenants on the property at this time. In the event other tenants lease some of the available space it will become necessary for the City to erect portable security barriers to isolate the impounded vehicle inventory. It is recommended that the City purchase/lease a modular office building for staff use at the facility. The utilities necessary for this operation are available at this site. Power and limited data connectivity will be utilized. Sewer is currently not available but IVDA has indicated a desire to deliver sewer to the site if economically feasible. It is proposed that the San Bernardino International Airport Authority ("SBIAA") would enter into a lease for a term not to exceed five (5) years in duration for the initial 3 `1/ acre parcel within the 20 acre paved site. The site could be expanded up to a total of 5 1/2 acres in one (1) acre increments based upon option language to be contained in the lease to provide for such expansion at the option of the Police Department. The initial rental rate will be set at $0.03 per square foot per month payable monthly to SBIAA with standard annual increases commencing as of the second year. The lease would also allow for a termination at the option of the Police Department if and when a suitable long-term site were located. Although the property mentioned above has been identified as being preferred at this time it is important to note that this location will likely not be a permanent site for this operation. As this program moves forward in future years, it will be necessary for the City to evaluate other potential properties for long term/permanent use. Tow Carrier Impact: Under the requirements set forth in the TSA, the carriers respond to all requests for tow services by the Police Department, the amount of vehicles towed annually has ranged from 6,000—9,000 calls for service in recent years. Of those totals, approximately 60% - 65% of the vehicles are considered"impounded,"meaning that the vehicle owner must satisfy some legal requirement to obtain a release for their vehicle. For instance, an owner with a vehicle impounded for expired registration in excess of six months will be required to pay the fees due to the Department of Motor Vehicles to bring the registration current and valid before an impound release will be granted. These are among the types of vehicles that will be delivered to the City impound facility. The remaining calls for service that the carriers receive from the Police Department (35% -40%) are stored vehicles or owner request tows. The carriers will maintain possession of these vehicles. Throughout the planning of this proposal, it has been the desire of the Police Department to create a system that will retain the current tow carriers to the maximum extent possible and continue to contract tow and storage services through the current carriers. This proposal continues the use of five of our current carriers to perform all towing operations generated by field and investigative operations of the Police Department. Under the proposed arrangement, carriers will be required to deliver specified vehicles to the Police Department facility (impounded vehicles) and continue to operate within their existing business model with the remainder of the vehicles towed. Storage fees that would be collected by the tow carriers for these impounded vehicles will now be retained by the City. However, the carrier will continue to realize all revenue from other towed and stored vehicles and will realize the towing fee for all vehicles delivered to the City's facility. Under the guidelines of the TSA, the tow carriers pay the City a franchise fee for performing towing services. Under the current plan that fee is a flat rate of $31,689 per month divided among the six carriers, or $5,281 each. This fee was established using a formula of$46.04 per vehicle that had been towed during a previous year's analysis. With the understanding that the lost revenue from the storage of vehicles impounded by the Police Department may impact the financials of each carrier, it is recommended that the franchise fee be adjusted. Therefore, it is recommended that the current flat rate be amended and a new franchise fee model of 10% of gross tow revenue generated through City business be adopted. This proposed franchise fee model will be more labor intensive, but it is believed that it will provide a more equitable business environment for the carriers. This plan would allow the carriers to pay a franchise fee that will be adjusted based upon their gross revenues each month and not be bound to a flat fee. The City may charge a franchise fee to recover actual and reasonable costs associated with the franchise program. This fee adjustment is similar to the fee structure adopted by the City of Colton. The functions of the impound facility operated by the Police Department will recover some of the costs in the existing program, and therefore it would be reasonable to alleviate some financial impact against the carriers. The existing TSA has been evaluated by the Police Department and suggested changes have been offered in the form of an amended agreement. This agreement is being submitted to the Mayor and Common Council for approval. The existing TSA with each tow carrier provides that their agreements are automatically amended when such amendments are approved by the Mayor and Common Council. Furthermore, these agreements contain a provision that allows either the tow carrier or the City to terminate the TSA on 30 days notice to the other party. C Members of the Police Department, Development Services, Facilities Management, City Attorney and City Manager have met with the carriers to discuss their concerns. Collectively,the carriers have stated that this program will have a impact on their profits. The carriers have I reported that approximately 45%of their gross revenues come from impound fees and taking this revenue from them will create a financial hardship. It is difficult for the City to be in a position to know exactly what the actual impact will be to the carriers. The concerns of each carver have become part of the overall evaluation of this proposal. However, in the research conducted with other communities that have implemented this type of program, it was reported that the primary resistance to change would come from the existing carriers. In many of the cases, similar claims were made by carriers in other communities. We have not found a case of a tow carrier that could not sustain business operations in other communities after this type of operation was implemented. See Attachment 3 for a summary of the current compared to the proposed structure. 1 • u F gig- it- • i. • • '. ♦ f N � �e � i 1 _ V y •N. ,° ✓ � _ ',. f 1 , re �4 1 �y �f ,LIM •t — s M AN ARN:555''' ix Cr - i b�•s '�' r M 3 I , z i ..., � F� .rs�.-. ~�"' ��.i�.".� - -�...._,,,�."._ n.". �I �a��l,� :��1 _o-=2 . • ATTACHMENT 2 of Business Plan Police Operated Impound Facility - IVDA Site Fiscal Year 2010-2011 Based on projected start date 1/1/11 FY Estimated 2010-2011 Annual Budget REVENUE 850 General Impounds 5 days 170,000 340,000 599 Lien Sale Vehicles @$778 466,022 932,044 239 Early Releases @ 5 days 47,800 95,600 359 30-Day Impound Releases 430,800 861,600 1448 Tow Fees $185 267,880 535,760 1448 Lien Fees(.$70 101,360 202,720 Total Revenue 1,483,862 2,967,724 NEW EXPENSES START UP Salaries/Benefits Paid During Set-Up 53,095 - - Salaries/Benefits for Operation 148,786 297,572 Forklift Lease(eff. l2/1/10 500 3,000 6,000 General Start Up Equipment 58,000 - - Property Lease effective 10-1-10 9,400 28,200 56,400 Office Lease(eff. 12/1/10 1,200 3,600 7,200 Utilities(eff. 12/1/10) 1,500 9,000 18,000 Other Operating Expenses(eff. 12/1/10) - 6,000 12,000 Security-Off Hours 84,000 168,000 Set Aside Account - 60,000 120,000 2046 Tow Fees @$185 378,510 757,020 2046 Lien Fees @$70 - 143,220 286,580 Bad Debt/Uncollectible - 70,000 142,000 Total All New Expenses 123,695 934,316 1,870,772 Current Resources Shifted to Impound Fac Salaries/Benefits Paid During Set-Up 60,595 Salaries/OT/Benefits/Supplies/Equip for Operations 326,665 1,019,770 City Administrative Costs(10%) 150,000 300,000 Loss in Franchise Fee (111,409) (222,818) Total Resources Shifted to Impound Fac 425,851 1,096,952 GRAND TOTAL NEW AND SHIFTED RESOURCES FOR IMPOUND FACILITY 1,483,862 2,967,724 `r ATTACHMENT 2 to Business Plan FY 2010/11 Budeet Narrative Revenue: Based on six month projected impounds. Estimated figures indicate there will be 850 general impounds and 1,197 30-day impounds. Of the 30-day impounds it is estimated that 599 vehicles will be sold through the lien process, 239 will be released early, and 359 will be claimed after the 30-day period. The proposed daily rate for the storage of impounded vehicles is $40 per day based on a cost analysis conducted by City staff. Tow Fees Collected— This is the estimated amount that will be collected through the program (later returned to the carriers under expenditures). Lien Fees Collected — This is the estimated amount that will be collected for lien services provided by an outside vendor(later returned under expenditures). New Expenses: Start-Up (One-Time Expenses) Salaries During Set-up — 1) Police lieutenant for three months @ $42,571 and 2) Impound Lot Attendant for one month @ $10,524 = $53,095 Forklift Lease—Delivery one month before operations = $500 � General Start Up Equipment—Facility preparation and site readiness $15,000; Office equipment $15,000; Transport Trailer $3,000; Miscellaneous equipment $10,000; Eagle Claw system $3,000;Network system install $5,000; and DIMS Server$7,000 = $58,000 Property Lease—Delivery two months before operation= $9,400 Office Lease—Delivery two months before operations=$1,200 Utilities—One month before operations = $1,500 Operational Costs (6 months)— These will become annual reoccurring costs Salaries During Operation — 1) Police lieutenant @ $85,182; 2) Impound Lot Attendants @ $63,604=$148,786 Forklift Lease - $500 per month= $3,000 Property Lease - $4,700 per month=S28,200 Office Lease - $600 per month effective=$3,600 Utilities—$1,500 per month= $9,000 Other Operating Expenses—Miscellaneous expenses @ $1,000 per month=$6,000 Off-Hour Security — Covers IVDA security guards staffing the facility during off hours = $84,000 Set-Aside Account—Site fund established for long-term infrastructure improvements. Tow Fees Paid — Payment to the tow carriers for services rendered. This number includes $267,880 from tow fees collected $110,630 from lien sold vehicles =$378,510 Lien Fees Paid— Payment to the vendor that will provide lien services. This number includes $101,360 from lien fees collected and $41,860 for lien sold vehicles =$143,220 Bad Debt/Uncollectible—This is an estimated figure. Impound Facility Recovery of City Costs: Salaries Paid During Set Up — Covers current City expenses incurred during the set-up process. All of these expenses are currently being paid from the General Fund. This includes portions of personnel salaries for two Police Lieutenants, a Traffic Sergeant, Public Safety IT Manager, and Administrative Analyst II. Salaries — Covers General Fund / Police Department expenses attributed to program operations and administrative management. City Administrative Costs — 10% of gross revenue to cover City administrative costs (City Manager, Facilities Management, Development Services, Finance, etc.). Loss of Franchise Fee — Covers the projected reduction in the Franchise Fee currently paid by the rotation tows. All revenues and expenses are estimates. / ATTACHMENT 3 to Business Plan POLICE IMPOUND FACILITY CURRENT STRUCTURE vs. RECOMMENDED STRUCTURE Current Structure Recommended Structure Towing Services • 6 tow carriers. • Carriers will continue to perform • 6,000-9,000 vehicles towed all towing services. annually. • Annual revenue to reimburse • $185 initial towing fee per vehicle costs—$1M. (Average). Storage& Impounds • Carriers store/impound all • All impounds(approximately vehicles at their facilities. 4,000-6,000)go to city facility. • All stored vehicles(approx.2,000 3,000) go to carriers' facilities. Lien Sales • Carriers lien sale unclaimed • City will assume lien sales of vehicles. unclaimed impounds. • Majority are 30-day impounds. • Carriers will continue to lien sale • Carriers claim that most are low unclaimed stored vehicles. value vehicles. • Financial impact to the carriers is unknown. Franchise Fee • $380,268 annual flat-rate fee. • Restructured to provide a fee • Equally divided between carriers. reduction to carriers. • Based on 2009 tow data. • Adjusted monthly based on 10% of gross revenue generated through City business. NOTE: The information above is based on Police Department data and does not include any financial information supplied by tow operators. r"" 1. Table Agenda item No. 14 2. Motion to direct City Manager to place an agenda item on the Council meeting agenda for February 22, 2011, either (1) establishing the revised franchise fee for Tow Services Agreements for calendar year 2011, or (2) approving a revised form of Tow Services Agreement. Entered Into Rec, at MCC/CDC Mtg: r o ,i by: (yrn�.�,. e lam, c� Agenda Item No: by: City ClerlclC C Secre ary City of Son Bernardino