Chapter 5.32 — NONEXCLUSIVE TOW FRANCHISE AGREEMENTS AND ROTATION OF TOW SERVICES

NONEXCLUSIVE TOW FRANCHISE AGREEMENTS AND ROTATION OF TOW SERVICES

• A. It is declared and determined that the business of police tow service affects the health, safety and public welfare of the residents of the City. The custody and control of vehicles owned by the public which are towed and/or stored at the order of the Desert Hot Springs Police Department for purposes of impound or facilitation of traffic flow, require a high degree of proficiency with the procedures established by the California Department of Motor Vehicles. In addition, a high level of trust and confidence is required by the public and the Desert Hot Springs Police Department, not only in the facilities used for storage, but also in the personnel and equipment utilized for towing vehicles to impound. Many such vehicles may be of high value, may themselves be or contain evidence of criminal activity, and which, if improperly towed or stored, could result in legal action against the City. The further responsibility of the police towing franchisee is not only to collect only the prescribed fee from owners of impounded vehicles and to release said vehicles promptly and efficiently, but also to, upon the evidence of proper documentation, require that only those towing entities who have demonstrated that they possess the facilities, control systems and knowledgeable personnel to protect the interests of the City and vehicle owners be allowed to perform the services expected under this franchise. Therefore, it is the purpose and intent of this chapter to regulate the purchase and rotation of tow services dispatched by the Desert Hot Springs Police Department pursuant to the authority conferred by the California Vehicle Code and to establish nonexclusive franchise agreements and franchise fee for these services.

• B. The City, by the adoption of Sections 100 and 101 of the City Charter, having elected to implement the home rule provisions of Article XI of the Constitution of the State of California as to municipal affairs and the granting of nonexclusive franchises of the nature referred to herein as being within the class of actions designated to “municipal affairs,” declares that the provisions of this chapter, together with the provisions of the City’s Charter, shall constitute the exclusive procedure for the grant of nonexclusive franchises for conducting police impound towing and storage services.

• (Prior code § 70.100)

For the purposes of this chapter, unless otherwise apparent from the context, the following definitions shall apply:

“Abandoned vehicle tows” means tows of vehicles left standing for a period of time greater than permitted under applicable State laws or municipal ordinances, and which vehicles have been tagged and marked for removal from public streets or property or from private property in accordance with law.

“City” means the City of Desert Hot Springs.

“City Clerk” means the City Clerk of the City of Desert Hot Springs.

“City Council” means the City Council of the City of Desert Hot Springs.

“City Manager” means the City Manager of the City or his or her authorized designee.

“Franchise” means nonexclusive franchise granted by the City Council for purposes of providing tow car services for tow services dispatched by the Desert Hot Springs Police Department.

“Franchisee” means any person or entity granted a nonexclusive franchise by the City pursuant to this chapter.

“Police emergency tows” means tows of vehicles involved in accidents, and/or stalled vehicles obstructing traffic, and/or tows of vehicles whose driver is incapacitated or physically unable to drive the vehicle, and/or tows of vehicles whose driver has been arrested and/or detained and cannot drive the vehicle.

“Police impound” means tows of vehicles impounded by the police which vehicles are held to be used as evidence in a criminal case, and which must be stored until release by the Desert Hot Springs Police Department personnel.

“Tow car” means a motor vehicle which has been altered or designed and equipped for and exclusively used in the business of towing vehicles by means of a crane, hoist, tow bar, tow line or dolly, or is otherwise exclusively used to render assistance to other vehicles.

“Tow franchise agreement” means the nonexclusive franchise agreement entered into between the City and an owner of tow cars that defines the obligations, procedures and terms for tow services dispatched by the Desert Hot Springs Police Department.

“Tow rotation list” means a list of qualified tow car operators engaged in the business of providing tow services who have entered into a tow franchise agreement with the City and shall be designated by the Desert Hot Springs Police Department for the purpose of rotating police dispatch of tow cars in accordance with this chapter, the franchise agreement and applicable State laws.

“Tow services” means any towing service dispatched by the Desert Hot Springs Police Department, including but not limited to tows requested in connection with official police business police-impounded vehicles, police emergency tows, VIN tows, and abandoned vehicles tows.

“VIN tows” means tows of vehicles necessitating special procedures to ascertain vehicle identification numbers in compliance with the requirements of California Vehicle Code Section 10751.

(Prior code § 70.101)

• A. Except as provided in this chapter, it is unlawful for any person to solicit or perform towing services dispatched by the Desert Hot Springs Police Department unless:

  1. A franchise therefor has first been granted pursuant to the provisions of this chapter and such franchise is in full force and effect; and

  2. A written tow franchise agreement therefor has been executed between such person and the City and such agreement is in full force and effect.

• B. This article shall not apply to towing, repair or storage services performed for or made available to members of the public by any person.

• (Prior code § 70.102)

The City Council may, and it is empowered but not obligated to grant to any qualified person or entity, a franchise to engage in the business of towing vehicles in response to police requests for towing services for purposes of impoundment within the City. (Prior code § 70.103)

• A. All franchises granted to persons pursuant to this chapter shall be nonexclusive. No provision of this chapter shall be deemed to require or to allow restricting the number of franchises to one or any particular number.

• B. All nonexclusive franchises shall be subject to the terms and conditions specified in the City Charter and in this chapter, in the resolutions granting the franchise and in the terms and conditions of the franchise agreement.

• C. In granting any franchise, the City Council may prescribe such other and additional terms and conditions, not in conflict with the City Charter, this chapter or applicable State law, as in the judgment of the City Council are in the public interest.

• (Prior code § 70.104)

At least one time per calendar year, the City Clerk shall cause the notice to be published in a newspaper of general circulation within the City, of a notice of request for applications for police tow services franchises. Any person who intends to operate as a franchisee shall apply to the City by filing with the City Manager or designee, upon forms supplied by City and in accordance with the request for applications, a verified application containing at a minimum the following information:

• A. Name and address of applicant;

• B. If the applicant is a partnership, the name and address of each partner shall be set forth in the application. If the applicant is a corporation, the application shall state the names and addresses of the corporation’s directors, main offices, major stockholders and associates, and the names and addresses of the parent and subsidiary companies;

• C. A list of all vehicles, including license plate numbers and vehicle identification numbers, to be used in connection with the franchise for which the application is filed;

• D. A list of all personnel assigned to perform services pursuant to such franchise accompanied by the California driver’s license number and license class of each such person;

• E. Proof of insurance in a form acceptable to the City;

• F. Payment of an application fee in an amount set forth each year by City Council resolution;

• G. Such other and further information as the City Manager may reasonably require to evaluate and process an application.

• (Prior code § 70.105)

• A. Upon receiving an application for a franchise under the provisions of this chapter, the City Manager shall present the application to the City Council at a regularly scheduled meeting thereof.

• B. The City Clerk shall cause notice of the application and of the time and place of hearing on the application to be published at least once in a newspaper of general circulation in the City at least ten days prior to the date set for the hearing. Additionally, the City Clerk shall mail or deliver notice of the public hearing to each applicant at least ten calendar days prior to the hearing.

• C. At the hearing on an application for a franchise, the City Council shall give all persons desiring to be heard a reasonable opportunity to present evidence or otherwise be heard in favor of or in opposition to the granting of a franchise to the applicant. At such hearing, the City Council may require from the applicant such additional information as the City Council may deem relevant and necessary. The hearing may be continued or adjourned to a stated time and place without the giving of further notice.

• (Prior code § 70.106)

• A. Upon conclusion of the hearing on the application for a franchise, or within a reasonable time thereafter, the City Council shall render its decision on the application. The nonexclusive franchise may, within the discretion of the City Council, be granted or denied, based upon compliance with this chapter. The City Council may deny grant of the nonexclusive franchise based on any of the following grounds:

  1. Failure to comply with the requirements of this chapter;

  2. The applicant has been removed from the tow rotation list within the last 24 months;

  3. A material statement made in the application is untrue;

  4. A fact exists of which the City Manager has knowledge which would cause for removal or suspension of the applicant from the tow rotation list;

  5. The applicant’s business or storage facility is not located within the City; or

  6. The applicant has a felony conviction.

• B. Any grant of franchise by the City Council may be subject to such terms, conditions, rules, regulations, restrictions and limitations such as the City Council deems necessary to protect the public health, safety or welfare.

• C. Should a franchise not be granted to an applicant, the City Clerk shall issue a written notice to the applicant.

• (Prior code § 70.107)

No franchise, if granted, pursuant to this chapter shall become effective unless and until all of the following requirements have been satisfied:

• A. The resolution of the City Council granting the franchise and approving tow franchise agreement is effective;

• B. The applicant and the City have signed, by their duly authorized representatives, a tow franchise agreement. The tow franchise agreement must be executed by the franchisee within ten days of passage of the resolution granting the nonexclusive franchise;

• C. Applicant has provided an acceptable list of the vehicles to be used to perform the services herein by registration or license number and the personnel assigned thereto as required herein; and

• D. The applicant has provided evidence of compliance with the insurance requirements and any other terms and conditions of this chapter and any other terms and conditions imposed by the City Manager.

• (Prior code § 70.108)

Following the public hearing, City Council’s determination to grant the franchise pursuant to this chapter and compliance with the requirements for the franchise pursuant to Section 5.32.090, the franchisee shall be placed on the City’s tow rotation list. (Prior code § 70.109)

Except as otherwise provided in this chapter, the Desert Hot Springs Police Department shall dispatch tow cars to perform tow services on rotation basis from a rotation list established and maintained in accordance with provisions of this chapter and franchise agreement. (Prior code § 70.110)

The tow franchise agreement shall among other things provide that the franchisee shall indemnify, hold harmless, release and defend the City, its City Council and each member thereof, and its officers, employees, commission members and representatives, from and against any and all liability, claims, suits, costs, expenses, fines, judgments, settlements, charges or penalties whatever, including reasonable attorneys fees, regardless of the merit or outcome of the same arising out of, or in any manner connected with, any or all of the operations or services authorized, conducted or permitted under a nonexclusive franchise agreement granted under this chapter. Applicants shall sign an affidavit in a form acceptable to the City Attorney that confirms their understanding of and agreement to the obligations imposed under this section, as a part of the application for a franchise pursuant to this chapter. (Prior code § 70.111)

The City Manager or designee shall be authorized to set the minimum levels and standards of liability insurance which must be maintained in order to apply for, to receive and to operate a franchise under this chapter. The City Manager or designee shall also establish the manner in which compliance with the minimum standards is demonstrated. The failure to maintain the minimum levels and standards of liability insurance for any period of time is a violation of this chapter and shall be sufficient grounds for temporary suspension or termination of a nonexclusive franchise. (Prior code § 70.112)

The term of any franchise granted under the provisions of this chapter shall be for one year with annual renewal options of up to four additional one-year terms, unless earlier terminated under the terms of this chapter.

(Prior code § 70.113)

A renewal option granted a franchisee may be exercised by the franchisee’s timely filing a renewal application within six months of the expiration of the term, upon forms supplied by the City. The renewal option shall be deemed granted unless, no later than 60 days from the date of filing the renewal application, the City Manager has found said franchisee not in compliance with the terms of this chapter, the franchise, the franchise agreement or other provision of law applicable to the towing services provided pursuant to the franchise. Upon such findings, the City Manager may deny the renewal option or grant it conditionally and, if denied, the franchise and all future options shall terminate.

(Prior code § 70.114)

• A. The City Council shall have the right to terminate or to suspend any franchise pursuant to this section.

• B. A notice of intent to terminate a nonexclusive franchise shall be personally delivered or mailed by certified mail, at the discretion of the City Manager, to the party named and to the address given on the application pursuant to which such nonexclusive franchise was issued. The notice shall state the grounds for termination or suspension and shall give the franchisee notice of a hearing before the City Council thereon, which shall be convened no more than 60 days after the date of notice unless the hearing cannot reasonably be set within such time, in which case the hearing shall be set as promptly as may be practical. The hearing shall be conducted and closed, and decision rendered thereon, within 60 days after the date of the notice unless it cannot then reasonably be completed, in which case it shall be completed as promptly as may be practical. The hearing shall be conducted and closed, and decision rendered thereon, within 60 days after the date of the notice unless it cannot then reasonably be completed, in which case it shall be completed as promptly as may be practical.

• C. The City Council shall have the right to terminate any nonexclusive franchise granted pursuant to this chapter if the City Council finds, based upon a preponderance of the evidence, after a public hearing, that: the franchisee has failed to comply with, or to do anything required of the franchisee by this chapter, or that franchisee has failed to pay the franchise fees required under this chapter or violated any provision of the ordinance granting the nonexclusive franchise, or any provision of the nonexclusive tow franchise agreement or any ordinance of the City or any law of the state or of the United States in connection with the performance of the nonexclusive franchise or that franchisee’s conduct demonstrates that the franchisee is unable to unwilling to comply with the terms of the nonexclusive franchise.

(Prior code § 70.115)

The City Manager may temporarily suspend any nonexclusive franchise and may be suspended from the tow rotation list without a hearing if the franchisee fails to comply with any of the terms, conditions, regulations or requirements of this chapter or tow franchise agreement, including but not limited to failure to maintain the minimum levels and standards of liability insurance or claims reserve, whenever there is a failure to keep in full force and effect any applicable licenses or permits required by federal, state or local law or whenever the franchisee has failed to observe or has defaulted in any material term of the franchise or franchise agreement including, without limitation, timely payment of franchise fees. The notice of temporary suspension may be personally delivered to the party named and to the address given on the application pursuant to which such franchise was issued, or, mailed by certified mail to the party named at the address given on the application pursuant to which such franchise was issued. The temporary suspension is effective upon the earlier of either receipt of said notice or the expiration of five days from the date of mailing. The notice of temporary suspension shall include a notice of the date and time for a termination hearing and all other information required by this chapter. The temporary suspension shall remain effective until the decision on termination by the City Council is made or unless the suspension is earlier lifted by written notice of the City Manager. (Prior code § 70.116)

• A. Each franchisee granted a franchisee pursuant to this chapter shall pay a franchise fee to the City during the term of such franchise. The franchise fee shall be in an amount as from time to time set forth in a resolution adopted by the City Council.

• B. Franchise fees shall be payable quarterly. The first payment of franchise fees shall be due and payable within 60 days from and after the end of the third calendar month after the month during which the resolution granting the nonexclusive franchise becomes effective, and thereafter payments shall be due and payable within 60 days from and after the end of each three-month period. Each payment shall be calculated in accordance with the provisions of the resolution adopted by the City Council pursuant to subsection A of this section.

• C. The franchisee shall pay the required franchise fee to the City. Each payment shall be accompanied by a written statement, verified by the franchisee or a duly authorized representative of the franchisee, showing in such form and detail as the Finance Director may prescribe the calculation of the franchise fee payable by the franchisee and such other information as the Finance Director may determine is material to a determination of the amount due.

• D. No statement filed under this section shall be deemed conclusive as to the matters set forth in such statement, nor shall the filing of such statement preclude the City from demanding and collecting by appropriate action the sum that is actually due and payable.

• E. The payment to the City by the franchisee pursuant to this chapter shall be in addition to any license fee or business tax prescribed by the City for the same period.

• (Prior code § 70.117)

City of Desert Hot Springs, CA § 5.32.190 BUSINESS LICENSES AND REGULATIONS

§ 5.32.190

The franchisee shall at all times maintain accurate and complete accounts of all revenues and income arising out of its operations under the franchise granted pursuant to this chapter; a list of vehicles towed, transported, or stored in impound; and any complaints by vehicle owners regarding same arising out of the performance of the franchise. Franchisee’s books, accounts and records pertaining to any income or expense shall at all times be open to inspection, examination and audit by authorized officers, employees and agents of the City. (Prior code § 70.118)