Fontana Municipal Code Art. VII Towing Carriers

Footnotes:

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Editor's note— Ord. No. 1190, § 3, adopted May 21, 1996, amended Art. VII in its entirety. See the Code Comparative Table.

Cross reference— Police, ch. 22.

It is the intent of this article and any subsequent amendments thereto to provide for and specify the means for the city to attain the best possible tow truck services for the city.

(Ord. No. 1190, § 3, 5-21-96)

The city council may at its discretion, by the adoption of a resolution or ordinance, grant a non-exclusive franchise to a tow truck operator to provide towing services to the city under and pursuant to the provisions of this article.

(Ord. No. 1190, § 3, 5-21-96)

(a) All franchises granted to franchisees pursuant to this article shall be nonexclusive and shall be for a term to be specified by the city council in the resolution granting a franchise hereunder and in the franchise agreement between the city and the franchisee.

(b) No provisions of this article shall be deemed to require restricting the number of franchises to one or any particular number, and no provision of this article shall be deemed to require the city council to grant any franchise if the council determines that the grant of any such franchise is not in the best interest of the city and the public.

(c) All tow truck operator franchises shall be subject to the terms and conditions specified in this article, as well any terms or conditions specified in the resolution granting the franchise and the franchise agreement.

(d) In granting any tow truck operator franchise, the city council may prescribe such other terms and conditions, not in conflict with this article, as are determined by the city council to be in the best interest of the city and the public.

(Ord. No. 1190, § 3, 5-21-96; Ord. No. 1281, § 1, 4-20-99)

A tow truck operator franchisee shall not sell, transfer, lease, assign, sublet, mortgage or dispose of in whole or in part, either by forced or involuntary sale, or by ordinary sale, contract, consolidation or otherwise, the franchise or any rights or privileges therein granted, without the prior written consent of the city council. The city council's approval of a transfer or assignment of a franchise granted pursuant to this article shall be conditioned upon the franchisee's sale or disposal of all ownership rights in the franchised tow truck business. A tow truck operator franchisee that desires to transfer or assign its franchise, because he or she intends to sell or dispose of all interests in the tow truck business that is franchised with the city, shall make a written request for a transfer or assignment of the franchise. The written request, a deposit of $1,000.00 and the proposed sale agreement or other document evidencing disposal of the franchised tow truck business shall be submitted to the management services department at least 120 calendar days before the requested effective transfer or assignment date. The management services department and the police department shall investigate the proposed transferee or assignee and determine whether the transferee or assignee is qualified to serve as a tow truck operator franchisee pursuant to the criteria and requirements set forth in this article and make a recommendation to the city council. Upon completion of the city council's approval or denial, the management services department shall provide the tow truck operator that requested the transfer or assignment with an accounting of the administrative and legal costs associated with the city's review of the franchisee's request for a transfer or assignment of the franchise refund accordingly. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise without the prior consent of the city council shall be null and void.

(Ord. No. 1190, § 3, 5-21-96)

Editor's note— Ord. No. 1294, § 1, adopted 7-20-99, repealed § 29-240 in its entirety. Formerly, said section pertained to authority to maintain its own towing operations and towing yard and derived from Ord. No. 1281, § 2, 4-20-99. See the Code Comparative Table.

Within 90 calendar days of the date an existing tow truck operator franchise is due to expire or whenever the chief of police determines that a new tow truck operator franchisee is needed to provide tow truck services to the city, the chief shall request that the management services department send out a notice of request for qualifications for a tow truck operator franchise. The request for qualifications shall be prepared by the management services department and shall be approved by the chief of police. The management services department shall select the most qualified tow truck operator, provided that the city receives at least one qualified proposal. The name of the most qualified proposer, if there is one, shall be forwarded to the chief of police who shall conduct a background investigation of the operator, his/her employees as well as to verify all information included in the proposal submitted to the city. Upon successful completion of the background investigation the chief of police shall recommend in writing to the city council a franchise based on the objective criteria established by resolution of the city council for determining who is the most qualified operator. In preparing requests for and evaluating the proposals received by the city, the management services department shall comply with the procedures and criteria adopted by resolution of the city council in accordance with this article.

(Ord. No. 1190, § 3, 5-21-96)

Any tow truck operator that obtains a franchise pursuant to this article shall:

(1) Be able to hold a minimum of 250 vehicles on its lot. Lighting shall be sufficient to afford easy visibility to all areas of the lot. The lot must be in a commercial area and be in the proper zone and located within the city's sphere of influence. The business must comply with all city or county and state standards and must possess a current city business license in accordance with chapter 15 of this Code.

(2) Have its lot completely enclosed with a minimum of six-foot fence topped by barbed wire or some other security device. Security shall be adequate to preclude theft, vandalism or damage by activity while in the carrier establishment. The view to all automobiles must be obstructed from the roadway. No vehicles shall be parked or stored on the public streets at any time. The business must provide off-street parking for its equipment and be able to accommodate at least four additional vehicles for customer parking. In addition to the four customer parking spaces, at least one additional customer parking space shall be provided for handicapped parking purposes. Said handicapped parking space shall be van accessible. Storage vehicles should be secured away from customer parking and the office area.

(3) Have an office and lot in the same location within the city's sphere of influence, with a sign posted including the company name, address, phone number and hours of operation, to be clearly visible from the roadway and shall have been operating out of an office and a storage yard within the city's sphere of influence for at least one year prior to applying for and obtaining a franchise pursuant to this chapter.

(4) Maintain a sign listing the rates and charges of all towing and storage services offered. Such sign shall be conspicuously placed in the office or other places where customer financial transactions take place.

(5) Have an attendant on call 24 hours a day, seven days a week, when the carrier is at the top of the rotation list, and respond to calls within 30 minutes. The business must maintain regular hours at a minimum of eight hours Monday through Friday.

(6) Have no more than two telephone numbers listed with the police department.

(7) Agree to protect, indemnify, defend and hold harmless the city from all claims, demands or liability arising out of or encountered in connection with its agreement with the city or the performance of work in preparation for the towing operation, or claims, demands and liability occurring during the towing and subsequent storage and maintenance activities whether such claims, demands or liability are caused by the tow service or its employees or agents.

(8) Use business-band two-way radios and shall not use a shortwave police scanner or C.B. radio to answer police calls.

(9) Post a tag on the windshield of all cars ordered impounded by the police department. In addition to posting a tag on the windshield of the car, an operator may also affix temporary markings on the car windshield.

(10) Collect all towing or hauling and storage charges, as well as city franchise fees, on each vehicle from the owner. In no event shall the city be liable for any such charge, and the carrier by accepting a license shall be considered as so agreeing. The franchise fees shall be paid in quarterly installments to the police department. Payments shall be delivered or mailed to the traffic division. Franchise fee payments shall become due and payable to the city within two weeks after issuance of the third monthly tow report of each quarter.

(11) When called from the top of the rotation list by the police department respond to the department's call and pick up all vehicles that have been involved in an accident or a traffic violation, unless the vehicles are needed for criminal evidence or the owner or someone designated by the owner is present and is capable of removing a vehicle or calling a tow company of his or her choice to remove a vehicle; provided the street can be cleared for safe public use with reasonable dispatch.

(12) Not release any vehicle in its possession for which a storage form was completed until all state and city requirements are met and appropriate franchise fees are collected. This does not apply to vehicles legally obtained through lien sale or which ownership is transferred to the franchise for payment of towing and storage fees.

(13) Furnish each owner of an automobile impounded by the tow truck operator with a fully itemized billing.

(14) Make a policy for lien fees, whereby a lien cannot be placed upon vehicle until after 72 hours of impoundment in accordance with state law. The policy shall comply with all requirements of California Vehicle Code, §§ 22851 through 22851.12, or their successor provisions.

(15) Tow and store police vehicles and vehicles seized as evidence in criminal investigations free of charge. Franchisees agree to hold the city harmless for fees and costs arising from the impound, storage, or notifications for vehicles that are seized as evidence in criminal investigations and that are seized and towed on account of an error by the police department. However, in cases where a vehicle is towed on account of an error by the police department, the police department shall pay the tow costs.

(16) Agree to abide by the rotation system established by the chief of police in accordance with this article.

(17) Have at least six operable tow trucks, of which one shall be a medium duty wrecker and one shall be a heavy duty wrecker or a heavy duty truck accompanied by a heavy duty tilt trailer, six qualified drivers each of whom shall be over the age of 18, and adequate equipment to handle police calls, impounds and storage of motor vehicles available when called upon. Franchisee affirmatively holds itself out as having the necessary means to tow a heavy duty commercial vehicle and auxiliary equipment and to safely transport motorcycles and agrees to be ready to respond with appropriate equipment.

(18) Have tow truck vehicles that are like new in appearance.

(19) Have a schedule of rates available upon demand in all vehicles at all times.

(20) Have all employee drivers licensed by the city in accordance with the City Code.

(21) Cooperate with police department inspections and make all drivers, vehicles, equipment, yards, and vehicle documentation available to the city within a reasonable time. The police department reserves the right to inspect all drivers, vehicles, equipment and yards. The police department also reserves the right to require that all towing vehicles be inspected by an automotive professional certified by the State of California Bureau of Automotive Repair, and selected by the police department. All vehicle inspection fees shall be borne solely by the franchisee and shall be due and payable upon presentation of the vehicle for inspection. A yearly inspection of all vehicles is required and the franchisee shall not interfere in any way with any such inspections. Any towing vehicle that fails an inspection shall not be used to provide towing service in the city until it is repaired and passes reinspection.

(22) Not charge rates that are greater than 115 percent of the schedule of rates for towing established by the California Highway Patrol for the Ontario area. These rates are determined via the competitive bid process and are annually updated by the state highway patrol. As they are updated, the new rates will become the rates for the towing carriers franchised by the city. If the state highway patrol does not update fees yearly, the city may grant a yearly cost of living increase in accordance with Consumer Price Index (CPI) published by the United States Department of Labor Bureau of Labor Statistics for the area of Los Angeles, Riverside and Anaheim, California, published in April of the year in which the increase is requested. Requests for a CPI increase shall be made in writing to the chief of police. The chief of police shall review the request and make recommendations to the city council as to whether or not increases should be granted.

(23) Obtain and produce upon request proof of workers' compensation, commercial liability and commercial automobile/truck insurance of not less than $1,000,000.00 combined single limits for each type. Said policies shall be endorsed to state that coverage shall not be reduced, suspended, voided or canceled by either party during the term of the franchise.

(24) Provide, free of charge, storage for at least ten vehicles seized by the city for evidentiary purposes for the amount of time necessary for the adjudication and disposition of the legal proceedings of the case. Franchisee agrees to provide storage for two vehicles in an indoor garage with access to the basic tools necessary to perform V.I.N. and mechanical inspections.

(25) Pay to the city a franchise fee in accordance with this article.

(26) Obtain driver permits for all employee drivers as required in section 29-141 of the Code of the City of Fontana. Franchisees who participate in the California Highway Patrol "pull program" are exempt from the yearly driver relicensing requirement in section 29-141(h) of the Code of the City of Fontana.

(27) Agree not to charge an after hours fee to persons who come to recover a stolen vehicle on a Saturday. Upon approval of the police department, the operator may release personal property from an impound vehicle at the request of the vehicle owner or their agent. There shall be no charge for the release of personal property during normal business hours. Operators may charge an after hours release fee for property released after normal business hours.

(28) Pass an investigation by the police department.

(29) All towing vehicles shall be equipped with the auxiliary equipment required for vehicles towing for the California Highway Patrol, in accordance with Attachment "C" of the State of California, Department of California Highway Patrol Tow Service Agreement (CHP 234 (REV. 1-98) OPI 061), or any successor Tow Service Agreement.

(30) Operators shall comply with all applicable federal, state and local regulations for providing towing service.

(31) Submit monthly response statistics for the monthly tow report to the traffic division of the police department. The reported data shall include any tows which may cause a discrepancy.

(Ord. No. 1190, § 3, 5-21-96; Ord. No. 1281, §§ 3, 4, 4-20-99; Ord. No. 1695, § 1, 6-24-14)

(a) Any tow truck operator granted a franchise pursuant to the provisions of this article shall pay to the city franchise charges and fees as may be determined by separate resolution of the city council. The franchise agreement entered into between the city and tow operator shall provide that any subsequent changes in the franchise fees and charges shall be applicable to the operator upon ten days written notice of such changes to the operator.

(b) Franchise fee payments due to the city under this section 29-243 shall be computed monthly. For the purpose of the franchise fee payment computation, the applicable accounting period shall be calendar month unless otherwise agreed to in writing by the city and the franchisee.

(c) The franchise fees shall be paid in quarterly installments to the police department. Payments shall be delivered or mailed to the traffic division. Franchise fee payments shall become due and payable to the city within two weeks after issuance of the third monthly tow report of each quarter. Each payment shall be accompanied by a brief report from the franchisee showing the basis for the computation and a written statement, signed under penalty of perjury by an officer of the franchisee, which identifies in detail the sources and amounts of gross revenues received by the franchisee during the month for which payment is made. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim that the city may have for further or additional sums payable under the provisions of this section 29-243.

(d) Any franchise fees which remain unpaid after the date specified in subsection (c) above shall be delinquent, shall result in a penalty equal to ten percent of the unpaid amount and the unpaid amount shall thereafter accrue interest at ten percent per year, compounded daily, until paid.

(e) The franchisee or the franchisee's designated representatives shall, upon five days' written notice from the city, make available to the city or the franchisee's designated representatives its accounting records for confidential inspection and audit. If the results of the audit show a franchise fee underpayment of greater than two percent, the franchisee will pay all costs associated with the audit in addition to any other amounts owed as shown by the audit. If the results of the audit show an underpayment of greater than ten percent, the franchisee will pay the cost of the audit plus 50 percent of the total error as a penalty in addition to any amount owed as shown by the audit. If the results of the audit show an underpayment of less than two percent or an overpayment, the city shall pay its own costs associated with the audit. Any underpayment shall result in a penalty equal to ten percent of the underpayment and the amount of such underpayment shall accrue interest at the rate of ten percent per annum, compounded daily from the date the underpayment should have been paid pursuant to subsection (c) above until the date the underpayment is paid.

(f) In the event the results of the audit are disputed, the city may, at its sole discretion, elect to arbitrate the dispute. In the event the city elects to arbitrate, the city and the franchisee shall each select an independent auditor at their own cost. The two auditors will agree upon the results of the audit. If the two independent auditors cannot agree upon the results of the audit, a third auditor will be selected by the two independent auditors to make a final determination. The determination of the third independent auditor will be final.

(g) By accepting any franchise granted pursuant to this article, the franchisee irrevocably waives the defenses of any statute of limitation, laches, waiver or other equitable doctrine of similar import or effect in any action brought by the city to recover any franchise fee, interest or penalties due under this section 29-243.

(h) By accepting any franchise granted pursuant to this article, the franchisee agrees that if it challenges the right of the city to collect the franchise fee provided by this section 29-243, any relief requested by franchisee and awarded to it by virtue of such challenge shall be prospective only from and after the date of the filing of the initial pleading seeking such relief in a court of competent jurisdiction. The franchisee hereby waives any and all claims or rights to collect back from the city, or obtain credit against future payment obligations, any amounts collected by the city prior to the filing of the initial pleading seeking such relief. In the event the franchisee's challenge to any franchise fee payments should result in an initial judgment in its favor, franchisee shall continue to make all franchise fee payments in accordance with this section 29-243 pending an appeal by the city. In the event the court of appeal, or trial court if city elects not to appeal, determines that the city is not entitled to collect any or all of the franchise fees, the city shall refund to franchisee those portions of the franchise fee which the court deems the city was not entitled to collect which were made subsequent to the filing of the initial action by franchisee, exclusive of interest on such amount.

(i) The city shall retain the right to impose alternative forms of taxes and/or fees in the event that the franchise fees provided for in this section 29-243 are no longer assessable due to a subsequent change in federal, state or local law.

(Ord. No. 1190, § 3, 5-21-96; Ord. No. 1281, § 5, 4-20-99; Ord. No. 1695, § 1, 6-24-14)

All franchises granted by the city council pursuant to this article shall be memorialized in a written agreement between the franchisee and the city and shall, be entered into within 30 days of the effective date of any city council action awarding a franchise. The written agreement shall be in a form approved by the city attorney. Each written agreement shall provide that the terms and conditions of each franchise as set forth in this article shall be incorporated by reference into the agreement. A franchise agreement may be extended, at the sole and absolute discretion of the city council, for a period, or periods, not to exceed 90 days. All terms and conditions contained in the prior written agreement between the franchisee and the city shall continue in full force and effect.

(Ord. No. 1190, § 3, 5-21-96; Ord. No. 1281, § 6, 4-20-99)

The tow truck operators who obtain a franchise pursuant to this article shall provide towing service to the city pursuant to the rotation system established by the chief of police. The chief of police shall develop a list of the franchised tow truck operators The franchise tow truck operator at the top of the list shall be on call to provide towing service to the city in accordance with the rotation system established by the chief of police. Once a tow truck operator completes its designated on-call service, the operator's name shall be moved to the bottom of the list and the operator then at the top of the list shall begin its designated on-call service. The city may request services from a franchised tow truck operator who is not on-call or who is not franchised under this article in emergencies when the city manager, chief of police or the watch commander deems an emergency to exist. The chief of police shall also develop a list of the franchised tow truck operators that have agreed to provide tow truck services for all city-owned vehicles free of charge. The franchised tow truck operators shall be on call to provide towing service to the city for city-owned vehicles.

(Ord. No. 1190, § 3, 5-21-96; Ord. No. 1281, § 7, 4-20-99)

(a) No franchise agreement shall be cancelled within two years of its effective date. The city council also reserves the right to suspend or revoke any franchise granted pursuant to this article and to rescind all rights and privileges associated with it at any time if:

(1) The franchisee defaults in the performance of its material obligations under this article or the franchise agreement and fails to cure such default within ten calendar days after receipt of written notice of the default from the city and a reasonable opportunity to cure the default in accordance with subsection (b)(1); or

(2) If the franchisee fails to provide or maintain in full force and effect the insurance coverage as required by this article and as set forth in the franchise agreement; or

(3) If the franchisee violates any order or ruling of any regulatory body having jurisdiction over the franchisee relative to the franchisee's tow truck business unless such order or ruling is being contested by the franchisee by appropriate proceedings conducted in good faith; or

(4) If the franchisee practices any fraud or deceit upon the city or upon persons to whom it provides tow truck service as determined by a court of law; or

(5) If the franchisee becomes insolvent, unable or unwilling to pay its debts and obligations, or is adjudged to be bankrupt. The city's revocation of the franchisee's franchise shall in no way affect any right of the city to pursue any remedy under the franchise or any other provision of law.

(b) Prior to suspending or revoking a franchise granted under this article, city shall give the franchisee notice and an opportunity to be heard on the matter, in accordance with the following procedures:

(1) The city shall first notify the franchisee of the violation in writing by personal delivery or registered or certified mail, and demand that the franchisee cure the default within a reasonable time, which shall not be less than ten days in the case of the franchisee's failure to pay any sum or other amount due to the city under this article or the franchisee's franchise agreement with the city and 30 days in all other cases. If the franchisee falls to correct the violation within the time prescribed or if the franchisee fails to commence correction of the violation within the time prescribed, the city shall give the franchisee 14 calendar days' written notice of a public hearing to be held before the city council. The written notice shall specify the alleged violations supporting the recommendation for suspension or revocation of the franchise.

(2) Prior to the public hearing, the city council shall hear and consider all relevant evidence submitted by staff and the franchisee or its agent or representative. If the city council finds that the franchisee has committed a material breach under the franchise agreement or this article and that the franchisee has not corrected the violation or has not diligently commenced correction of the violation after receiving proper notice in accordance with this article, the city council may suspend or revoke the franchise.

(c) Notwithstanding the city council's right to suspend or revoke a franchise, the chief of police shall have the right to suspend, for a period not to exceed 30 days, any franchise granted pursuant to this article, and to rescind all rights and privileges associated with it during the suspension period, if, the franchisee violates any provision of this ordinance, state or federal law which places the health or safety of the public in immediate danger.

(Ord. No. 1281, § 8, 4-20-99; Ord. No. 1294, § 2, 7-20-99)