HomeMy WebLinkAboutStaff Report 08 12/03/20018
CITE' OF PETALUMA, CALIFORNIA
AGENDA BILL
Agenda Title:
Meeting Date:
Resolution Authorizing City Manager to Sidi Amendment to Tow
December 3, 2001
Service Agreement with American Tow Service
Reviewed by City Attornev:
Department:
Director:
Contact Person:
Phone Number:
Iden Savano
Police
Patrick T Parks
(707) 778-4455
Cost of Proposal:
Account Number:
$ 0.00
001-400-2122
Amount Budgeted:
Name of Fund: Traffic Safety
$ 0.00
Attachments to Agenda Packet Item:
1. Agenda Report
2. Existing Tow Service Agreement Addendum B
3. Resolution Authorizing City Manager to Sign Amendment to Tow Service Agreement
(including Fourth Amendment and ExJiibits A -D)
Summary Statement:
On November 15, 2000, the Police Department implemented the existing Tow Service Agreement (TSA). Staff
has identified procedures within the current TSA that reduce cost recovery and cause unnecessary personnel costs.
Staff has also learned that the condition of the present economy has reduced demand for vehicles and in tarn has
reduced the tow operator's ability to dispose of vehicles through the lien sale process. Current restrictions within
the TSA make the disposition of vehicles even more difficult and as a result, the available storage space at the
storage facilities maintained by the tow operators continues to decrease.
The proposed Fourth Amendment to the Tow Service Agreement, if approved, would create the following changes
to current operation of the 30 -day impound and forfeiture program: 1) transfer responsibility for handling lien
noticing and document preparation from the City to the tow operator; 2) provide the tow operator with discretion to
reduce storage fees in cases of economic hardship or to accept transfer of ownership in lieu of payment of storage
fees for low value vehicles, and 3) collection of the assessment fee will be simplified. In addition, the tern of the
Tow Service Agreement will be extended to June 30, 2002.
These changes are expected to increase the number of claimed vehicles resulting in an increase in revenue for the
City. The changes will also reduce personnel costs to the City by decreasing the amount of time spent processing
impounded vehicles for lien as well as the time involved in the management of fees collected and the proper
distribution of those fees back to the tow operators. The tow operators will also realize the same cost savings and
revenue increases.
Council Priority: THIS AGENDA ITEM IS CONSIDERED TO BE PART OF, OR NECESSARY TO, ONE OR
MORE OF THE 1999-2000 PRIORITIES ESTABLISHED BY. THE CITY COUNCIL ON JANUARY 30, 1999 AND
MARCH 18, 2000. Priority(s): No.
Recommended City Council Action/Suggested Motion:
Approve resolution Authorizing the City Manager to Sign Amendment to Tow Service Agreement with American
Tow Service. 11
Reviewed by Finance Director:
Reviewed by City Attornev:
A e
V ` M a er:
Date:
Date:
Todav's Date:
ReVision # iiid Date Revised:
FOe:
#1 November 28, 2001
November 28, 2001
CITY OF PETALUMA, CALIFORNIA
DECEMBER 3, 2001
AGENDA REPORT
FOR
Resolution Authorizing City Manager to Sign Amendment to Tow Service Agreement with
American Tow Service.
Executive Summary
On November 15, 20002 the Police Department implemented the existing Tow Service
Agreement (TSA). Staff has identified procedures within the current TSA that reduce cost
recovery and cause unnecessary persomiel costs. Staff has also learned that the condition of the
present economy has reduced demand for vehicles and in turn has reduced the tow operator's
ability to dispose of vehicles through the lien sale process. Current restrictions within the TSA
make the disposition of vehicles even more difficult and as a result, the available storage space at
the storage facilities maintained by the tow operators continues to decrease.
The proposed Fourth Amendment to the Tow Service Agreement, if approved, would
create the following changes to current operation of the 30 -day impound and forfeiture program:
1) transfer responsibility for handling lien noticing and document preparation from the City to
the tow operator; 2) provide the tow operator with discretion to reduce storage fees in cases of
economic hardship or to accept transfer of ownership in lieu of payment of storage fees for low
value vehicles, and 3) collection of the assessment fee will be simplified. In addition, the term of
the Tow Service Agreement will be extended to June 30, 2002.
These changes are expected to increase the number of claimed vehicles resulting in an
increase in revenue for the City. The changes will also reduce personnel costs to the City by
decreasing the amount of time spent processing impounded vehicles for lien as well as the time
involved in the management of fees collected and the proper distribution of those fees back to the
tow operators. The tow operators will also realize the same cost savings and revenue increases.
BackEround
The TSA was implemented by the Police Department on November 15, 2000. Staff
identified several changes that would improve the cost effectiveness of the TSA for both the City
and the tow operators.
The current state of the economy has without question impacted potential cost recovery
under the TSA. The downturn of the economy has translated into more unclaimed vehicles and
less demand from consumers to purchase used vehicles. As a result, tow operators in this
jruisdiction as well as other operators in other jurisdictions are finding it more difficult to dispose
of vehicles. Although more beneficial to the City during strong economic times, the current
restrictions under the TSA make the disposition of vehicles more difficult and as a result the City
and the tow operators have seen a reduction in revenue. Staff is proposing the removal of certain
restrictions placed on the tow operators related to the disposition of vehicles to improve their
ability to dispose of the vehicles more effectively. This will in turn increase revenue for the City
and the tow operators.
When the costs associated with the administrative processes and procedures carried out
by City staff related to the TSA were compared to the revenues being generated to offset those
costs we discovered several of the processes and procedures were not cost effective. Two areas
we found to be the most costly included the lien sale processing and the control and distribution ('
of fiords collected at the Police Department.
Processing vehicles for the lien sale has proven to be a cost that we cannot seem to
recover through the existing process. This is due to the number of unclaimed vehicles that
cannot be sold because of low value or the lack of demand for these vehicles. The tow operators
processed this paperwork before the current TSA was implemented and it was cost effective for
them. Staff is recommending that the tow operators, at their request, assume responsibility for
processing the liens. This will eliminate additional costs incurred by the City under the TSA.
The control and distribution of funds to the tow operators for their portion of the fees
collected by the Police Department has proven to be more costly than originally anticipated.
Although it has been a good control process, staff could significantly reduce these costs by no
longer collecting all fees due by the vehicle owner at the front counter of the Police Department.
Instead, staff would only collect the City's Administrative Tow Fee and the tow operator would
collect the remaining fees due to them. This would remove the bi-weekly payments to the tow
operators and also eliminates the costs associated with managing revenues from all fees being
collected at the front counter. The Police Department would adopt a monthly billing process
where the towing operator would receive a monthly invoice from the City for the City's portion
of the Assessment Fee from vehicles released during the previous 30 days. These changes not
only reduce City staff time and costs, but will also translate into a cost savings for the tow
operators as well.
Alternatives
The Council may choose to reject the current proposal to modify the TSA. This decision
would continue the unnecessary costs incurred by the City for processing impounded vehicles
and could potentially eliminate available storage facilities for stored or impounded vehicles.
Financial Impacts
Currently, approximately 45% of the vehicles impounded are not claimed by the owners.
This results in a cost of approximately $70 per vehicle to the City for the processing of the lien
paperwork. By transferring the lien procedure to the tow companies, the City should realize an
annual savings.
The financial impacts related to the removal of certain restrictions on the disposition of
vehicles are difficult to forecast due to outside economic influences and a lack of previous data
under the same conditions from which to make projections. In simple terns, the changes will
minimally reduce the amount of cost recovery through Assessment Fees on unclaimed vehicles
sold through the lien process, but the ability of the tow operators to manage their own business
transactions will likely increase the number of claimed vehicles. This increase translates into
more efficient cost recovery for the City because a vehicle owner who would normally not be
able to afford to pay the total of all fees due, may be able to make arrangements with the tow
operator that will facilitate the vehicle being claimed. As a result, the City may see an increase
in cost recovery from an increase in the number of claimed vehicles. These increases will come
from the collection of the Administrative Tow Fee and the Assessment Fee.
iii
Conclusion
Staff has carefully reviewed the operational and cost effectiveness of the current TSA
cooperatively with the tow operators. Staff and the tow operators agree with the identified cost
saving and cost recovery improving modifications proposed in this report for mutual benefit.
The tow operators have agreed to these proposed terms and are willing to extend the current
agreement to June 30, 2002.
OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS
OR COMPLETION
At the end of six months, Staff will conduct a cost -benefit analysis of these changes and
report to the Comicil whether the changes have been positive or negative and will propose other
changes if needed. The report will be completed by the Police Department Traffic Division
Sergeant.
RECOMMENDATION:
Authorize the City Manager to Sign Amendment to Tow Service Agreement with
American Tow Service.
ry
Petaluma Police:Investigations i707i 778-4825 11/2B/01 02:15P P.002
Tow Service Agreement (Rtv 1-99)
City of Petaluma
Addendum `B"
August 7, 2000
ADDENDUM `B"
Paragraph 2 - Rotation Tow Lists Defined - Section D
Serious Traffic Offender Program (STOP)
Vehicle Forfeiture and 30 -Day Vehicle Impound Program
Rotation Tow Agreement
pp`� Se r q i c.1,
This Agieement is made and entered into by and between � MEY Cry 1'� 10 �0, ("Contractor")
and the City of Petaluma, a municipal corporation, ("City") and shall be dated as of
2i ` ` In consideration of the mutual covenants and conditions set forth herein- the
parties agree as follows:
I. SERVICES
A. General
Upon request of the Petaluma Police Department, Contractor shall tow vehicles
taken into custody by the Petaluma Police Department pursuant to §
14602.6/14607.6 CVC, and perform any work that may be necessary preliminary
to towing within the City of Petaluma or any place as directed by the Petaluma
Police Department.
B. Rotation
In the event the City of Petaluma contracts with more than one (1) tow service, the
Chief of Police, or his designee, will implement a rotation call system in order to
reasonably equalize distribution of calls for 30 -day impound service.
C. Storaae Facilities
Operators wishing to participate in the Vehicle Impound and Forfeiture Program _
shall provide a storage facility as follows:
1. Capacity to store 30 vehicles outside.
2. Capacity to store 5 vehicles under sheltering cover, offering
protection from elements.
D) Hours
The contractor shall staff its office at its place of business for the release of
impounded vehicles between the hours of 8:00 a.m. and 5:00 p.m., Monday
through Friday. However, when in the opinion of the Chief of Police of the City
of Petaluma, or his designee, unusual circumstances warrant the release of an
impounded vehicle or vehicles between the hours of 5:00 p.m. and 8:00 a.m. the
Chief of Police or designee may order an emergency release, and the contractor
agrees to provide personnel at a call station where they may be contacted for such
emergency release or releases during such hours. Contractor shall post the
Page t of 8
Petaluma Palica/Investigations (707) 77B-4825 11/28/01 02:1SP P.008
Tow Service Agreement (Rev 1-99)
City of Petaluma
Addendum "B"
August i, 2000
telephone number of the call station at a conspicuous place at the entry of the
property. Only a thirty -minute response time to be at the storage location for
contractor personnel will be allowed for these after hour release. Anyone
requesting after hours release may be charged un to fifty (50) percent of the
current tow rate for such release.
E. Release of Vehicles
No vehicle shall be released by contractor except to an authorized receiver
designated in the City's Release Form; duly signed by the Police Department.
Contractor shall train its personnel in release procedures to ensure vehicles are
released only to authorized persons and only upon receipt of the City's duly
executed Release Form. Vehicle releases issued by the Police Department will
only be valid on the day they are issued. Expired releases require the registered
owner to return to the Police Department for the issuance of a valid release.
F. Disposition of Impounded/Forfeited Vehicles
When City determines that all paperwork has been completed for a lien sale or
sale -in -lieu of lien sale ("sale") for any particular impoundedtforfeited vehicle or
vehicles, City shall so notify Contractor, and unless such notice directs Contractor
otherwise, Contractor shall then promptly deliver such vehicles) to the auction
house designated by City under Paragraph VI below.
G. Retention of Imuounded Vehicles
Notwithstanding paragraph F above, Contractor may select no more than two (2)
vehicles per month out of those vehicles impounded under Vehicle Code Section
14602.6, for a maximum of 24 vehicles per year to withhold from the sale
procedure set forth below upon payment to the City of the administrative tow fee
authorized under Section 22850.5CVC for each such vehicle withheld from the
sale procedure. Notwithstanding the above, Contractor may dispose of any
vehicle agreed by City to be a low -value vehicle as described in Section
22851.6CVC through a dismantler or scrap iron processor.
Ii. COMPENSATION
A. Rates
The rates contractors shall charge for towing and storage services as a result of
Petaluma Police Department vehicle impounds and forfeitures shall be in
accordance with the rates set forth below.
Tow.......................................390.00
Storage ................................$25.00 per day tTnside or Outside)
Page 2 of 8
Petaluma Police:'Investigations i707i 77e-4829 11125!01 OZ ISP P.004
Tow Service Agreement (Rt: 1-99)
City of Petaluma
Addendum "B"
August 7, 2000
A copy of the rates shall be available for public inspection at the
contractor's place of business.
B. Assessment Fee
Assessment Fee shall mean the fee or assessment imposed by the City of Petaluma
on the contractor solely because of its status as contractor for the storage of
vehicles per this Agreement. Assessment Fee shall not include:
Any tax, fee or assessment of general applicability (including any tax, fee
or assessment imposed on both businesses and contractor or their services
but not including a tax, fee or assessment which is unduly discriminatory
against contractor or its customers); or.
2. Requirements, reimbursements, charges or fees incident to the awarding,
enforcing, transfer or renewal of this Agreement, including payments of
bonds, consultants, administrative expenses, attorney fees, security funds,
letters of credit insurance, indemnification or penalties.
3. The assessment fee does not include the Administrative Tow Fee
authorized under CVC Section 228:0.5.
i.
C. Assessment Fee Amount
The Assessment Fee shall be equal to thin- three and a third (33 1/3) percent of
gross income charged by the contractor for vehicle storage after. the fifth day of
storage. Gross income includes all revenues collected from persons or companies
for vehicle storage per section 14602.6 and 14607.6 of the California Vehicle
Code.
D. Assessment Fee Collection
All fees shall be collected by the City of Petaluma prior to City's issuance of a
Vehicle Release Form. The tow fee and the storage fee (less the Assessment Fee
retained by the City of Petaluma) shall be remitted to contractor monthly.
Contractor acknowledges that all fees due Contractor may not be collected by City
under the procedures agreed to herein for various reasons, including but not
limited to those circumstances where owners of towed vehicles do not seek
release of their vehicles, an ad judicatary body refuses to order the payment
required hereunder, or the sale price of an auctioned vehicle does not exceed the
total amount of the lien. Acknowledging these facts Contractor waives any claim
against City for any shortfall in moneys remitted to contractor caused thereby.
Page 3 of 8
Petaluma Police/Investigations (707) 778-4325 11,128;O7 02:1SP P.00S
Tow Service Agreement (Rev 1-99)
City of Petaluma
Addendum "B"
August 7, 2000
E. Disbursement of Fees
Fees collected under this agreement will be payable, and disbursed, in the
following order:
1. Contractor—Tow charge and first five (5) days of storage
2. City — Administrative Tow Fee (Per CVC 22350.5)
3. City — Lien Sale Processing Fee
?. The remaining balance, if any, will be disbursed between the Ciry and
Contractor at the ratio of 2/3 to Contractor, and 1/3 to City.
III. GENERAL RESPONSIBILITIES OF THE CONTRACTOR
A. Cancellation of Contract.
Unless otherwise specifically provided for in the contract should the contractor
default or fail in the performance of any of the provisions of the contract and such
default or failure is not corrected within ten (10) days after written notice to the
contractor from the chief of Police, or his designee, specifying the default and
demanding its corrections; or, if the default or failure is of similar nature to a
previous default or failure, then the City may cancel the contract. City may
terminate this AL -cement with or without reason on thirty (3 0) days written notice
to contractor.
B. Nondiscrimination in Service.
Contractor shall not discriminate in its performance of services under this
agreement in employment practices due to race, color, religion;,rlational origin,
ancestry, sex, age, physical or mental handicap, or other prohibited basis.
C. Audit Reports.
If an audit pertaining to work performed under this contract is conducted by the
Federal or State auditor or any auditor employed by contractor, contractor shall
file a copy of such audit with the Director of Finance within ten (10) days unless
otherwise provided by contract or regulations. Failure to comply constitutes
material breach upon which the City may terminate contract with ten (10) days
written notice.
D. Assianments.
The contractor shall not assign, subcontract or transfer by operation of law any
obligation hereunder without prior written consent of the City.
Paae 4 of 9
Petaluma Police/Investigations (707) 777-4325 1112&,o1 02:1sP P.00e
Tow Service Agreement (key 1-99)
City of Petaluma
Addendum "B"
August 7, 2000
E. Entire Aereement.
This Agreement inteaates all of the terms and conditions mentioned herein or
incidental hereto and supersedes all negotiations and prior writings with respect to
the subject matter hereof. No modification is effective unless siened in writing by
both parties.
F. Independent Contractor.
The contractor is and shall at all times remain as to the City a wholly independent
contractor. Neithcr the Gry nor any of its officers, employees nor agents shall
have control over the conduct of the Contractor not any of the contractors
officers, employees nor agents, except as herein set forth. The contractor shall not
at any time or in any manner represent that it or any of its officers, employees or
agents are in any manner officers, employees or agents of the City.
K. Attorney Fees Aoolicable Law and Forum.
In the event either party brings an action or proceeding for damages arising out of
the other's performance under this Agreement or to establish the right or remedy
of either party, the prevailing party shall be entitled to recover reasonable attorney
fees and costs as part of such action or proceeding. This Agreement shall be
construed and interpreted according to California law, and any action to enforce
the terms of this agreement or for the breach thereof shall be brought and tried in
the County of Sonoma-
IV.
onoma
IV. TERM OF AGREEMENT.
This Agreement shall commence on NO•J 2VY1� eY ` — i 7 C�1 �� and shall
expire i t S �' . 7� O '7�,G i unless sooner terminated pursuant to the terms of this
Agreement.
V. NOTICES.
Notices pursuant to this Agreement shall be given by person or by the United States Mail.
postage prepaid, addressed as follows:
(a) To City: Patrick Parks
Chief of Police
969 Petaluma Blvd North
Petaluma, California 94559
Pate 5 of 8
Petaluma Police/In estigarions (7071 779-49='9 11J29/o1 0e:15P P.007
Tow Service Agreement (Rev 1-99)
Citv of Petaluma
Addendum "B"
August 7, 2000
(b) To Contractor 1 2'C \ � rin
(Name)
(Mailing Address).
San C�
(Storage Address). CiC
9f�� U m' n �� O 6,�
(City, State, Zip Code)
Notice shall be deemed to have been served upon personal service or if deposited in the
mail, on the third business day after the same has been deposited in the United States
Postal Service. This shall be valid and sufficient service of notice for all purposes.
VZ SERVICES TO BE PROVIDED BY CITY
A. Contractor hereby authorizes the City to act as its agent to arrange the sale of
vehicles impounded under Vehicle Code Section 14602.6 or 14607.6 in
accordance with Article 3 of Chapter X (commencing with Section 22650) of
Division 11 of the Vehicle Code and Sections 3067-3075 of the Civil Code. City
shall provide all notices required to effectuate such sales and may secure the
services of a registration service agent to provide notice and/or process lien
papers. In the event City utilizes a registration sales agent, City shall advance the
costs of such services, and Contractor shall reimburse City for such costs from the
processing fee allowed to be charged by Contractor upon sale or release of the
vehicle. _
B. City may contract on a Contractor's behalf and cost with one or more auction
houses to conduct the sales. The parties agree that the cost of such auction
services shall not exceed ten percent (10%) of the proceeds received from the sale
of the vehicle. Any contract with an auction house shall provide for periodic
listings of vehicles sold and the amount of proceeds received by the auction
house. The amount of proceeds received by the auction house minus the cost of
the auction services ("net proceeds") shall be remitted by the auction house to the
City. Upon receiving the net proceeds from the sale of any vehicle from the
auction house, City shall, remit to Contractor the Contractor's cost of processing
the vehicle (which shall not exceed the statutory maximum minus the amount paid
to the registration service agent) and will disburse the sale proceeds as described
in Section 11, paragraph E. up to the amount necessary to discharge Contractor's
lien; provided, however, that after payment of the initial tow and five days
storage charge, City may withhold from the amount due Contractor the
Pale 6 of 3
Petaluma Poi icel T nest igat i onE C707i 77B-4829 11.'26.'01 02:15P P.00B
Tow Service Agreement (Rev 1-99)
City of Petaluma
Addendum "B"
August 7, 2000
assessment fee due under Paragraph H B of the Agreement for each day's storage
recovered by the sale. In accordance with statutory requirements, City shall remit
to DMV anv moneys remaining after payment of the City's administrative fees,
costs of processing the vehicle, and amount of the impound lien_
C. City agrees to use reasonable efforts to comply with its obligations hereunder.
However, City shall not act as a guarantor of the sale of any of the vehicles nor the
particular amount that may be realized with respect to any particular vehicle.
Moreover, Contractor acknowledges that all fees due Contractor may not be
collected by City under the procedures aareed to herein because certain rights
given the registered or legal owners of the vehicle, because of a defect in the
procedure or because of the proceeds from the sale of the impounded vehicle is
insufficient to discharge all obligations, etc. Acknowledging these facts,
Contractor waives any claims against City for any shortfall in moneys remitted to
Contractor caused thereby.
Page 7 of S
Petaluma Police;Investio=tions C7077 77B-4929 11,129!01 o2:1SP P,009
Tow Serric$ AEreenient (Rev i 11a
City of Perainma
Addendum "3"
A usust Z 2000
ddendua `3" OP SR,-k.TOR approval:
T c2 -of ±n T have rr.= and understand this Tow Serlice �--eeme:t (Re-: 1-99) SOC -ac, a*.a
a="'e` to abler by 311_ of the provisions. 1 IL1 ffr agee to index nif i. _E.2ap. and. Save lta�ss `e
CSV of e'.;_tuma, Its ofEcers. a9.ents and emnlpvees tYOtn any and Lill cinims and loss --s 2r=;l 9
or --suitiart ca the OPERATOR in connection with the pe:=ormaac_ of :iris _a mon
ant, and a_l c_pirnc and losses aeon g or Iesulting to any Person, E= or torpor-17oL :+no
be iniu ed or daaa°ed by the OPERATOR in periortnance of till a_�ment. Tae ape =-or sad
the meats and employees of the ape:aror. in the performance of this Q eemeat sbpd ancr in
indepeadear cnnamvi and not as of ices or emplovees or aa -eats of the Ciry of Petal,} lam^
% WT"ititSS A=T-RtOF, the parties hereto havecaused this _ meat io b e.e s `e e<;:
and v23r nr � above wrrtea.
Contac or_ A m,Q„r i, Ar-, i SL(U �CLN ofPe'al
(,brier-} L, tttue-II�R ���r
Owner Chi�f UiPolice
i
i acre Dare
2DRO'V= AS TO FORM:
City AuaMeV
Circ Cle:l-DEPUrY
1
2 AUTHORIZING THE CITY MANAGER TO SIGN AMENDMENT TO
3 TOW SERVICE AGREEMENT WITH AMERICAN TOW SERVICE
4
5
6
7 WHEREAS, on November 15, 2000 the Police Department implemented the existing
8 Tow Service Agreement with Betsy Kunzman-Mueller, dba American Tow Service ("American
9 Tow Service"); and
10
11 WHEREAS, the proposed Fourth Amendment to the Tow Service Agreement (attached
12 hereto and incorporated herein) will result in potential savings to the City of Petaluma and
13 American Tow Service; and
14
15 WHEREAS, both the City of Petaluma and American Tow Service have reviewed the
16 proposed changes and are in agreement with said changes.
17
18 NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Petalurna
19 does hereby authorize the City Manager to sign the amendment to the Tow Service Agreement
20 with American Tow Service.
21
22
23
24
25 reso
26 11/28/0, (fmk)
FOURTH AMENDMENT OF TOW SERVICE AGREEMENT
( INCLUDING ADDENDA A AND B
1. This Fourth Amendment to the Tow Service Agreement including Addenda A and
B ("this Amendment") is made as of December 3, 2001, between the City of Petaluma and Betsy
Kunzman-Mueller, dba American Tow Service ("American Tow Service").
2. The City of Petaluma and American Tow Service entered into a Tow Service
Agreement, including Addenda A and B, for participation on the City of Petaluma's rotation tow
list(s), effective November 15, 2000 ("the Original Agreement"), and subsequently amended on
June 1, 2001 ("First Amendment"), on July 1, 2001 ("Second Amendment") and on November
14, 2001 ("Third Amendment"). The Original Agreement, First Amendment, Second
Amendment and Third Amendment are incorporated by reference herein (collectively, the
"Second Amended Agreement"), and attached hereto as Exhibit A, B, C and D, respectively.
3. The purpose of this Amendment is to improve the cost-effectiveness of the Third
Amended Agreement for both parties and to extend the term of the Third Amended Agreement to
June 30, 2002.
4. Section III.E of Addendum B provides that no modification of the Tow Service
Agreement is effective unless signed in writing by the parties.
5. The parties wish to amend the Third Amended Agreement as set forth herein:
a. Section I.F of Addendum B provides as follows:
Disposition of Impounded/Forfeited Vehicles
When city determines that all paperwork has been completed for a
lien sale or sale -in -lieu of lien sale ("sale") for any particular
impounded/forfeited vehicle or vehicles, City shall so notify
Contractor, and unless such notice directs Contractor otherwise,
contractor shall then promptly deliver such vehicle(s) to the
auction house designated by City under Paragraph VI below.
The parties wish to delete Section LF in its entirety.
b. Section I.G of Addendum B currently provides as follows:
Retention of Impounded Vehicles
Notwithstanding paragraph F above, Contractor may select no
more than two (2) vehicles per month out of those vehicles
impounded under Vehicle Code Section 14602.6, for a maximum
of 24 vehicles per year to withhold from the sale procedure set
forth below upon payment to the City of the administrative tow fee
authorized under Section 22850.5CVC for each such vehicle
withheld from the sale procedure. Notwithstanding the above,
Contractor may dispose of any vehicle agreed by City to be a low-
value vehicle as described in Section 22851.6CVC through a
dismantler or scrap iron processor.
The parties wish to delete Section LG in its entirety.
C. Section ILC of Addendum B currently provides as follows:
Assessment Fee Amount
The Assessment Fee shall be equal to thirty-three and a third (33-
1/3) percent of gross income charged by the Contractor for vehicle
storage after the fifth day of storage. Gross income includes all
revenues collected from persons or companies for vehicle storage
per Section 14602.6 and 14607.6 of the Califontia Vehicle Code.
The parties wish to amend Section H.0 by deleting the current text and amending
Section II.0 to provide as follows:
Assessment Fee Amount
The Assessment Fee shall be thirty-three and one-third (33-1/3)
percent of vehicle storage fee collected by the Contractor for each
vehicle stored pursuant to this Agreement, excluding the fees
collected for the first five (5) days of storage. Notwithstanding any
other provision of this Agreement, the Contractor may elect to
reduce the total amount it collects for storage of a vehicle based on
economic hardship to the registered owner. If a Contractor elects
to reduce the amount of storage fees it collects from a registered
owner, the Assessment Fee shall be thirty-three and one-third (33-
1/3) percent of the amount collected after deducting the
Contractor's tow charge and a lien processing fee of $35. In the
event the amount due for storage fees exceeds the value of the
impounded vehicle, the Contractor may, at the request of the
registered owner, elect to accept transfer of ownership of the
vehicle in lieu of payment of storage fees. No assessment fee shall
be due to the City if transfer of ownership of the vehicle is
accepted under these circumstances as full and final satisfaction of
towing charges due to Contractor. Contractor is responsible for
timely providing the City with information regarding the amount of
storage fees collected and regarding the disposition of impounded
vehicles, including the amount of lien sale if applicable, on a form
to be provided by the City.
d. Section ILD of Addendum B currently provides as follows:
Assessment Fee Collection
All fees shall be collected by the City of Petaluma prior to City's
issuance of a Vehicle Release Form. The tow fee and the storage
fee (less the Assessment Fee retained by the City of Petaluma)
shall be remitted to contractor monthly. Contractor acknowledges
that all fees due Contractor may not be collected by City under the
procedures agreed to herein for various reasons, including but not
limited to those circumstances where owners of towed vehicles do
not seek release of their vehicles, an ad judicatory [sic] body
refuses to order the payment required hereunder, or the sale price
of an auctioned vehicle does not exceed the total amount of the
lien. Aclaiowledging these facts Contractor waives any claim
against City for any shortfall in moneys remitted to contractor
caused thereby.
The parties wish to amend Section H.D of Addendum B by deleting the current
text and by amending Section H.D to provide as follows:
Assessment Fee Collection
The City will bill Contractor for the Assessment Fee due to the
City from the Contractor pursuant to Section ll.0 of this
Agreement. The Contractor shall remit the fees due to the City
within thirty (30) days of billing. Any dispute concerning the
billed amount shall be brought to the attention of the Traffic
Supervisor immediately.
e. Section ME of Addendum B currently provides as follows:
Disbursement of Fees
Fees collected under this agreement will be payable, and disbursed,
in the following order:
1. Contractor - Tow charge and first five (5) days of storage
2. City - Administrative Tow Fee (Per CVC 22850.5)
3. City - Lien Sale Processing Fee
4. The remaining balance, if any, will be disbursed between the
City and Contractor at the ratio of 2/3 to Contractor, and 1/3 to
City.
The parties wish to amend Section ME of Addendum B by deleting the current
text and by amending Section ME to provide as follows:
Statutory Notices and Documentation
The Contractor shall be responsible for properly completing all
notices and documentation required by law for impounded
vehicles. The Contractor shall also be responsible for disposition
of any unclaimed vehicles through lien sale, auction, or release to
an auto dismantler in accordance with all applicable requirements
of State law.
f The original Agreement provided at page 56, and at page 5 of Addendum
B, that the tern of the original Agreement expires on June 30, 2001. The First Amendment
extended the terns of the original Agreement from June 30, 2001 to November 14, 200 1. The
Third Amendment extended the term of the Second Amended Agreement from November 14,
2001 to December 3, 2001.
The parties wish to amend the Third Amended Agreement by extending the term
of the Third Amended Agreement from December 3, 2001 to June 30, 2002.
6. All provisions of the Third Amended Agreement, except as modified by this
Amendment, shall remain in full force and effect and are reaffrnned. Other than as stated in this
Amendment, this Amendment shall not operate as a waiver of any condition or obligation
imposed on the parties under the Third Amended Agreement.
7. In the event of any conflict, inconsistency or incongruity between any provision of
this Amendment and any provision of the Third Amended Agreement, the provisions of this
Amendment shall govern and control.
8. This Amendment, together with the Third Amended Agreement, constitute the
entire agreement between the parties to the Third Amended Agreement pertaining to the subject
matter of this Amendment, and any and all other written or oral agreements existing between the
parties before the date of this Amendment with respect to the subject matter of this Amendment
are expressly canceled.
NOW, THEREFORE, in consideration of the mutual obligations in the Third Amended
Agreement, the parties to this Amendment agree as follows: The terms of the Third Amended
Agreement shall be amended as set forth herein and the term of the Third Amended Agreement
shall be extended to June 30, 2002.
This Amendment shall be effective as of December 3, 2001.
CITY OF PETALUMA AMERICAN TOW SERVICE
M
Fred Stouder, City Manager
Approved as to Form:
Clare M. Gibson, Assistant City Attorney
aermt
11/28/01 (fmk)