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HomeMy WebLinkAboutA- 3 Towing Franchise Agreement Recommendations A 6 tiL row— AZUSA AGENDA ITEM TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: COUNCIL SUBCOMMITTEE ON TOWING FRANCHISE AGREEMENTS DATE: OCTOBER 1, 2001 SUBJECT: TOWING FRANCHISE AGREEMENT RECOMMENDATIONS RECOMMENDATION It is recommended City Council approve the Towing Contract Subcommittee's recommendations for designing a non-exclusive franchising process. BACKGROUND During the past year, staff developed a process for awarding an exclusive franchise agreement to one towing operator in contrast with the past practice of awarding multiple contracts with three towing operators. The goals of that process were to enhance revenue, maximize customer service for the citizens of Azusa and to provide the best service to the Azusa Police Department. As a result of that elimination process, Jan's Towing was deemed to be the most responsive to the City's needs. Staff presented the recommendation to enter into an exclusive franchise agreement with Jan's Towing to City Council. At that council meeting, the recommendation was met with opposition by the other towing companies, namely, Johnie's, Freeman's and Cities Towing companies. During this Council meeting and a subsequent meeting, more discussion led City Council to rethink the practicality of an exclusive franchise agreement given the effects on the remaining towing companies. It was concluded that a subcommittee of City Council would work with staff to review and recommend guidelines for the creation of a new process that would result in the award of multiple franchise agreements. This policy change would require that the process used for an exclusive franchise agreement selection be abandoned and replaced with a process for multiple franchises. This is an important distinction, in that, the initial process was set up to have the towing companies outbid each other and have staff select the one company who offered the City the highest revenue source, best customer service and best service to the Azusa Police Department. A multiple franchise agreement process would differ by placing minimum requirements that each company would have to meet in order to be considered for a franchise agreement. Staff al2-1a9/ 7//01/ have been instructed to develop that minimum qualifying criteria which, again, would set the standards of revenue collection, customer service and service to the Azusa Police Department and to return to City Council within 30 days to approve the process. In the interim, staff has also been requested to meet with all the towing companies to explain the new process and its components to avoid confusion of what will be required of them to be eligible for the award of a franchise agreement. The subcommittee will also review, amend and approve the new process. The towing companies will be allowed an adequate amount of time-estimated to be approximately 30 days - to comply with the requirements in order to be eligible for a franchise agreement. Any company not willing to meet these minimal requirements, will not be awarded a franchise agreement. After the company is granted its franchise agreement, staff will review its performance within a one year period to assess its performance under the minimum requirements imposed through this process. Staff has been asked to prepare a "report card" format by which each company will be graded on their performance during the prior year. This report card will assess the franchisee's performance in relation to customer service, emergency response, etc. If any company has been found to be under-performing, it will be placed on "probation" for a pre-determined period of time to correct the deficiency or deficiencies. Should the company be unable to cure the problem(s) encountered, its contract with the City would be terminated and no longer be eligible to provide services until the franchise agreements have all expired. The subcommittee is recommending that the initial term of the franchise agreements be for five years with services being provided at pre- determined intervals/cycles, i.e., weekly, monthly, etc. The subcommittee will make its recommendation as to what those cycles should be to best meet the needs of the City. During City Council's deliberations on this matter, the issue of equipment and services provided by one company versus another that went beyond normal towing operations, such as major accident support for the Police Department, was also discussed. The subcommittee is recommending that the Police Department issue a separate, open purchase order with any company providing those exclusive services to be used on an as needed basis rather than requiring that type of capital investment of all companies. The subcommittee anticipates that City Council will have the final process and recommendations for consideration by its first meeting of November, 2001. FISCAL IMPACT The current towing contracts that have been extended with Johnnie's, Freeman's and Cities Towing indefinitely. These contracts currently provide the City with approximately $35,000 in revenue. It is anticipated that the new process will enhance this revenue stream. Staff have been asked to review how the City could derive a revenue stream from the sale of impounded vehicles and any other equipment sales the franchisee may engage in. The City is also entitled to pass on the administrative cost of the original exclusive franchise agreement process as well as the cost of developing the new multiple franchise agreement process. Staff will provide City Council with the estimated cost of developing these processes at its first meeting in November.