Pomona Municipal Code § 58-675 Selection of franchisees

Footnotes:

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Cross reference— Licenses, permits and miscellaneous regulations, ch. 30; vehicles for hire, ch. 66.

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

(Ord. No. 3965, § 1(11.3-1), 10-21-2002)

The city council may at its discretion, by the adoption of an ordinance, grant a nonexclusive franchise to a tow truck operator to provide towing services to the city under and pursuant to the provisions of article XIII of the Charter and the provisions of this article.

(Ord. No. 3965, § 1(11.3-2), 10-21-2002)

(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 ordinance granting a franchise and in the franchise agreement between the city and the franchisee, subject to the requirements of city Charter sections 1301 through 1303.

(b) No section of this article shall be deemed to require restricting the number of franchises to one or any particular number, and no section 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 as any terms or conditions specified in the ordinance 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 public.

(Ord. No. 3965, § 1(11.3-3), 10-21-2002)

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 the 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 who desires to transfer or assign his franchise, because he 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 nonrefundable deposit set by resolution of the city council and the proposed sale agreement or other document evidencing disposal of the franchised tow truck business shall be submitted to the department of finance at least 120 calendar days before the requested effective transfer or assignment date. The department of finance 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. 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. 3965, § 1(11.3-4), 10-21-2002)

(a) If the chief of police determines that, due to an increase in the volume of calls and/or expiration or termination of an existing franchise, an additional or new tow truck operator franchisee is needed to provide tow truck services to the city, the chief may first approach the remaining or current franchisees regarding the possibility of increasing their towing capacity to meet the increased city demands. If the remaining or current franchisees are unable or unwilling to meet the increased demands of the city, the chief shall request that the department of finance send out a notice of request for qualifications for a tow truck operator franchise. The request for qualifications shall be prepared by the department of finance and shall be approved by the chief of police. The department of finance 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 and his employees and 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 an award of a franchise based on the objective criteria established by the chief of police and as set forth in this article. Franchises shall be awarded at the city council's discretion in a manner consistent with the provisions of article XIII of the city Charter and this article. In preparing requests for and evaluating the proposals received by the city, the department of finance shall comply with the procedures and criteria established by the chief of police and in accordance with this article.

(b) At least 120 calendar days prior to the expiration of any existing franchise agreement, the chief of police, director of finance and city manager shall enter into discussions with the franchisee regarding the potential extension of the franchise agreement. If the parties reach a mutually acceptable agreement to extend the franchise, a new franchise shall be awarded at the city council's discretion in a manner consistent with the provisions of article XIII of the city Charter and this article. Nothing in this section shall be construed to limit the ability of the city council to approve, deny or modify any franchise agreement extension, negotiated by city staff. If no agreement for the extension of the franchise is reached prior to the expiration of the franchise term, including any option periods, the franchise will be considered expired, and notice of a request for qualifications must be sent out under the procedures outlined in this section.

(c) Notwithstanding subsections (a) and (b) of this section, the initial selection process after the adoption of the ordinance from which this article derives shall be conducted utilizing an expedited request for the qualification procedure to all existing tow truck operators on the city's current rotation, as well as any tow truck operators who have requested inclusion on the rotation within the preceding six calendar months. Again, nothing in this section shall be construed to require the city council to approve any specific franchise application or to limit the ability of the city council to approve, deny or modify any franchise agreement submitted to it for approval.

(Ord. No. 3965, § 1(11.3-5), 10-21-2002)

(1) The tow service operator shall be able to hold a minimum of 75 vehicles on a lot within the City of Pomona. Lighting shall be sufficient to afford easy visibility to all areas of the lot. The lot must be in a commercial or industrial area in a zone for which the business use is permitted and located within the city. The business must comply with all city, county, and/or state standards and must at all times possess a valid and current city business license in accordance with article VIII of chapter 50. All vehicles towed by a franchisee pursuant to the terms of the franchise shall be stored within the City of Pomona and available for release at the premises specified in condition 3 below.

(2) The tow service operator shall have his lot completely enclosed with a minimum of a six-foot high fence equipped with a security device, as approved by the community development department. Security in the lot shall be adequate to preclude theft, vandalism or damage by activity while in the carrier establishment. No stored vehicles shall be visible from any adjacent roadway. No vehicles shall be parked or stored on the public streets at any time. The business must provide offstreet 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 parking for disabled persons. The diabled persons parking space shall be van accessible. Storage vehicles should be secured away from customer parking and the office area.

(3) The tow service operator shall have an office and lot in the same location with the city, with a sign posted including the company name, address, phone number and hours of operation, to be clearly visible from the roadway.

(4) Any tow operator seeking award of a non-exclusive tow franchise shall meet all requirements set forth in this article and shall be required to demonstrate either of the following:

a. Operation as a vehicle tow and storage provider for a minimum of four consecutive years within the State of California; or

b. Operation as a contracted vehicle tow and storage provider for a public agency within the State of California for a minimum of two years.

(5) The tow service operator shall 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.

(6) The tow service operator shall have a driver on call 24 hours a day, seven days a week, when the carrier is at the top of the rotation list, and shall respond to calls within 20 minutes or 40 minutes for heavy-duty tows. If the carrier is unable to respond within the required time period and does not notify the police department that there will be an extended delay, a member of the police department shall forward a memorandum to the chief of police within 24 hours reporting the delay and the nonresponse. The business must be open to the public at least eight hours per day, Monday through Friday.

(7) The tow service operator shall have no more than two telephone numbers listed with the police department.

(8) The tow service operator shall agree to protect, indemnify, defend and hold harmless the city and the redevelopment agency of the city and its officers, employees, appointed or elected officials 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.

(9) The tow service operator shall use business-band two-way radios and shall not use a shortwave police scanner or C.B. radio to answer police calls.

(10) The tow service operator shall affix temporary markings on the windshield of all cars ordered impounded by the police department. In addition an operator may post a tag on the windshield of the car.

(11) The tow service operator shall collect all towing or hauling and storage charges on each vehicle from the owner. In no event shall the city be liable for any such charge, and the carrier by accepting a franchise shall be considered as so agreeing. A detailed accounting of the number of released vehicles subject to the franchise fee shall be submitted with the monthly payment to the city. The right is reserved by the city to audit, at any time, any and all amounts collected by the towing carrier for hauling and storage charges. It is the responsibility of the tow carrier to maintain and to make available, as requested, sufficient documentation to support such an audit; however, in no event shall the city require documentation to be maintained by the franchisee for a period longer than three calendar years.

(12) When called from the top of the rotation list by the police department, the tow service operator shall 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 choice to remove a vehicle, provided the street can be cleared for safe public use, as determined using reasonable dispatch by the officer on the scene.

(13) The tow service operator shall not release any vehicle in his possession for which a storage form was completed until all state and city requirements are met. This does not apply to vehicles legally obtained through lien sale or for which ownership is transferred to the franchisee for payment of towing and storage fees.

(14) The tow service operator shall furnish each owner of an automobile impounded by the tow truck operator with a fully itemized billing.

(15) The tow service operator shall implement a written policy for lien fees, whereby a lien cannot be placed upon a vehicle until after 72 hours of impoundment in accordance with state law. The policy shall comply with all requirements of Vehicle Code §§ 22851—22851.12 and shall be posted with the sign listing the tow rates.

(16) The tow service operator shall tow and store police vehicles inside the city, vehicles within ten miles of the city boundaries, and vehicles seized as evidence in criminal investigations free of charge. The tow service operator shall tow any city vehicle, with the exception of city vehicles requiring a heavy-duty tow, within the city boundaries free of charge. The tow service operator shall tow any city vehicle requiring a heavy-duty tow, regardless of location, and any city vehicle located outside the city or police vehicle more than ten miles from the city boundaries, at a cost equal to 50 percent of the established rate for such tows.

(17) The tow service operator shall agree to abide by the rotation system established by the chief of police in accordance with this article.

(18) The tow service operator shall have at least five tow trucks, one of which shall be a heavy-duty wrecker, or heavy-duty tilt trailer, capable of towing class-A recreational vehicles and heavy commercial vehicles; five 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 on top of the rotation list.

(19) The tow service operator shall have tow truck vehicles that are like new in appearance.

(20) The tow service operator shall have a schedule of rates available upon demand in all vehicles at all times.

(21) 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 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. The towing franchisee is responsible for arranging the annual vehicle inspection with the police department. 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. In lieu of these inspection procedures, the chief of police may deem the inspection procedures of the state highway patrol that are in effect at the time to be sufficient to meet the requirements of this subsection.

(22) The tow service operator shall not charge rates in excess of the rate schedule approved by the city council. Requests for a rate 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) The tow service operator shall obtain and produce, upon request, proof of workers' compensation, insurance to the extent required by law in the amount of $1,000,000.00 per occurrence, and commercial liability and commercial automobile/truck insurance of not less than $1,000,000.00 per occurrence, $2,000,000.00 aggregate. Such policies will name the city as additional insured and in addition shall be endorsed to state that coverage shall not be reduced, suspended, voided or canceled by either party during the term of the franchise, except upon 30 days' written notice to the city.

(24) The tow service operator shall provide, free of charge, storage for four vehicles in an inside garage for V.I.N. and mechanical inspections, at the request of the police department.

(25) The tow service operator shall pay the city a franchise fee in accordance with this article.

(26) The tow service operator shall agree not to charge an after-hours fee to persons who appear to claim a stolen vehicle on a Saturday between the hours of 8:00 a.m. and 12:00 p.m. Upon approval of the police department, the operator may release personal property from an impounded vehicle at the request of the vehicle owner or his 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.

(27) All towing vehicles shall be equipped with the auxiliary equipment required for vehicles towing for the state highway patrol, in accordance with attachment C of the state department of highway patrol tow service agreement (CHP 234 (Rev. 1-98) OPI 061) or any successor tow service agreement.

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

(29) The city reserves the option under this article and all franchise agreements granted pursuant to this article to require any tow operator to submit, on a quarterly basis, to the police department and not later than 20 days after the end of each quarter, response time statistics for all police tows, if the city determines that there are problems related to response times for any tow operator. This requirement shall continue in effect until otherwise waived by the city.

(Ord. No. 3965, § 1(11.3-6), 10-21-2002; Ord. No. 4171, § 1, 6-17-2013; Ord. No. 4176, § 1, 10-21-2013; Ord. No. 4318, § 1, 8-1-2022)

(a) Any tow truck operator granted a franchise pursuant to this article shall pay 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 30 days' written notice of such changes to the operator.

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

(c) The monthly franchise fee payments shall be due and payable on or before the 20th day of the month immediately following the month for which the franchise fee is calculated. 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 or deposit of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance or deposit of any payment be construed as a release of any claim that the city may have for further or additional sums payable under this section.

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

(e) The city reserves the right under the franchise to conduct quarterly audits to verify the number of vehicles upon which the franchise fee is computed. In addition, the franchisee or the franchisee's designated representatives shall, upon 15 days' written notice from the city, make available to the city its accounting records for confidential inspection and audit. If the results of the audit show an underpayment of less than five percent or an overpayment, the city shall pay its own costs associated with the audit. If the results of any audit show a franchise fee underpayment of greater than five percent, the franchisee will pay all costs associated with the audit, the total amount in error as indicated by the audit, and a penalty equal to ten percent of the amount in error. If the results of the audit show an underpayment of greater than ten percent, the franchisee will pay the cost of the audit, the total amount in error as indicated by the audit, a penalty equal to 50 percent of the amount in error, and interest on the amount in error at the rate of ten percent per annum, compounded daily from the date the underpayment should have been paid pursuant to subsection (c) of this section until the date the underpayment is paid in full.

(f) If the results of the audit are disputed, the city may, at its sole discretion, elect to arbitrate the dispute. If 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, and the cost will be split between the city and the franchisee. 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 legal or 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.

(h) By accepting any franchise granted pursuant to this article, the franchisee agrees that if he challenges the right of the city to collect the franchise fee provided by this section, any relief requested by the franchisee and awarded to him by virtue of such challenge shall be prospective only, and only from 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. If the franchisee's challenge to any franchise fee payments should result in an initial judgment in his favor, the franchisee shall continue to make all franchise fee payments in accordance with this section pending an appeal by the city. If the court of appeal or trial court, if the 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 the franchisee those portions of the franchise fee which the court deems the city was not entitled to collect and which were made subsequent to the filing of the initial action by the franchisee, exclusive of interest on such amount.

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

(Ord. No. 3965, § 1(11.3-7), 10-21-2002)

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 not to exceed 90 days or any extension period contained in the written agreement between the parties, whichever is longer. All franchises granted pursuant to this article shall be for an initial term of three years and shall contain an option to extend the franchise for a minimum of one year to a maximum of three three-year extension periods. In no event shall any parol agreement pertaining to extension of a franchise be entered into or considered binding upon the city. 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. 3965, § 1(11.3-8), 10-21-2002)

(a) The tow truck operators that 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. A separate rotation system will be implemented for the towing of heavy-duty/recreational vehicles (RVs) that will follow the format of the rotational system implemented for other tow services. The franchised tow truck operator is required to respond while on-call for both rotation lists. Any refusal by a franchised tow truck operator to respond for an on-call rotational tow request will result in forfeiting the position at the top of the on-call rotation in addition to a franchise agreement violation report submitted to the office of the chief of police. The city may request services from a franchised tow truck operator which is not on call or which is not franchised under this article in emergencies when the city manager, chief of police or the watch commander deems an emergency to exist.

(b) Notwithstanding subsection (a) of this section, the city also reserves the right to make a special request for a particular tow operator, out of rotation, should the circumstances necessitate the request in order to serve the best interests of the city. All franchised tow truck operators shall hold the city harmless from any mistake made in the rotation assignments.

(Ord. No. 3965, § 1(11.3-9), 10-21-2002; Ord. No. 4318, § 2, 8-1-2022)

(a) No franchise agreement or franchise renewal agreement granted pursuant to this article shall be cancelled, without cause, within one year 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 the franchisee:

(1) Defaults in the performance of his material obligations under this article or the franchise agreement and fails to cure such default within 30 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) of this section;

(2) 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;

(3) 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;

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

(5) Becomes insolvent, unable or unwilling to pay his 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, the 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 for 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 fails 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) At the hearing the city council shall hear and consider all relevant evidence submitted by staff and the franchisee or his 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 section of this article, state or federal law which places the health or safety of the public in immediate danger.

(Ord. No. 3965, § 1(11.3-10), 10-21-2002)