HomeMy WebLinkAbout14-215 Adoption of a Res. Awarding Tow FranchiseCITY OF
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LASE LSIIJORE
DF'.EAM EXI- REME,.
REPORT TO CITY COUNCIL
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
' FROM: GRANT YATES, CITY MANAGER
DATE: JULY 22, 2014
SUBJECT: Adoption of a Resolution Awarding Tow Franchise
Agreements and Establishing Tow Franchise Fees
Recommendation: It is recommended the City Council approve and adopt:
Resolution No. 2014- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, CALIFORNIA, AWARDING TOW FRANCHISES AND
ESTABLISHING TOW FRANCHISE FEES
Background
Pursuant to California Vehicle Code Section 12110(b), the City has the authority to grant
franchises to companies that provide certain towing services and to collect a franchise
tow service fee to offset actual and reasonable costs incurred in connection with
administering its police towing program.
In February, the City Council adopted Ordinance No. 2014 -1322 amending and restating
Chapter 12.14 of the Lake Elsinore Municipal Code regarding rotational tow services. At
this time, the City Council also approved a form franchise agreement in preparation of
updating and soliciting new tow franchise agreements, which were last approved in 2001.
City staff issued a notice of request for qualifications (RFQ) to solicit qualified tow truck
operators interested in entering into a franchise agreement to provide rotational police
towing and storage services to the City of Lake Elsinore and the Lake Elsinore Police
Department. In addition, a franchise fee cost study was initiated to determine the
estimated costs of the towing program and establish an appropriate franchise fee.
All five of the local tow truck operators responded to the RFQ. The City and Police
Department conducted a multi -step evaluation of the submitted tow franchise proposals
to ensure they met all qualifications as specified in the RFQ and /or the franchise
agreement. This included facility and equipment inspections by the Police Department
and City staff to assess the quality and condition of the vehicles, equipment, and storage
areas.
Resolution Awarding Tow Franchise Agreements and Establishing Franchise Fees
July 22, 2014
Page 2 of 3
Discussion
The Lake Elsinore Police Department and the City have determined that all tow
companies have met or exceeded the requirements of the RFQ and the Tow Operation
Franchise Agreement.
Pursuant to Chapter 12.14, Police Chief Leonard Hollingsworth determined the number
of franchisees needed to provide towing services to the Police Department. Therefore,
Chief Hollingsworth is recommending the award of franchises to all five (5) tow companies
including: Brother's Towing, Lear Autobody & Towing, Steve's Towing, Town & Country
Towing and United Towing Services.
Previously, the City had franchise agreements with four of the local companies. The
proposed recommendation adds an additional tow truck operator, United Towing
Services, to the Police Department's rotational tow schedule. This schedule revolves on
the basis of one tow operator per week (Monday — Sunday). Additional tow service needs,
such as DUI checkpoints, are distributed evenly among the franchisees each year.
The proposed franchise agreements would be for a term not to exceed four years with
the new agreements taking effect August 4, 2014, with the possibility of a two -year
extension for well - performing franchisees.
Previously, the City has received a flat franchise fee of $500 per year as established in
2001. However, as the costs of police services have increased so have the costs of
administering the tow program. The City conducted a comprehensive franchise fee
analysis to estimate its overall costs to administer the police towing program each year.
This analysis included the estimated time spent by City and Police Department staff on
the tow program, their hourly rates, any revenues received for the program, and
projections for the next three years. Current sources of revenue for the program include
the existing franchise fee of $500 per franchisee and Vehicle Impound Cost Recovery
Fees (VICR) paid by registered or legal owners who seek the release of a vehicle that
has been impounded. While the VICR fees offset a majority of the cost associated with
the program, the franchise fee can be used to fill the gap in the overall costs of the
program, which are estimated to be approximately $20,000 per year.
Based on this analysis as shown in Exhibit A, staff recommends the following franchise
fee schedule to gradually fill the gap in cost over the next four years:
• Year 1: $1,000 flat -fee per franchisee
• Year 2: $2,000 flat -fee per franchisee
• Year 3: $3,000 flat -fee per franchisee
• Year 4: $4,000 flat -fee per franchisee
The proposed increase in the franchise fee and the addition of other in -kind services, as
specified in the franchise agreement, will allow the City to adequately cover all costs
associated with administering a tow program locally. These additional in -kind services
Resolution Awarding Tow Franchise Agreements and Establishing Franchise Fees
July 22, 2014
Page 3of3
include towing City and /or police vehicles as needed and storing up to four (4) vehicles
on site per franchisee for evidence. Going forward, staff believes an annual flat -fee
approach will ensure the City does not incur significant administrative burdens and
additional expenses in administering the franchise agreements.
Fiscal Impact
The proposed increase in the tow franchise fee will generate additional funding for the
City's police towing program of $3,000 in fiscal year 2014/2015, $8,000 in fiscal year
2015/2016, $13,000 in fiscal year 2016/2017 and $18,000 in fiscal year 2017/2018.
Prepared by: Nicole Dailey, Management Analyst
Approved by: Leonard Hollingsworth, Police Chief
Approved by: Grant Yates, City Manager
Attachments: Resolution No. 2014- Awarding Tow Franchises and
Establishing Tow Franchise Fees
Exhibit A: Tow Franchise Fee Cost Analysis
Exhibit B: City Tow Operation Franchise Agreement (as approved in
February 2014)
RESOLUTION NO. 2014-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, AWARDING TOW FRANCHISES AND
ESTABLISHING TOW FRANCHISE FEES.
WHEREAS, pursuant to California Vehicle Code section 12110(b), the City has
the authority to grant franchises to companies that provide certain towing services and
to collect a franchise tow service fee to offset actual and reasonable costs incurred in
connection with administering its police towing program; and
WHEREAS, the City seeks to provide a fair and impartial means of distributing
requests for towing services among qualified franchises, and to ensure that such
service is prompt and reasonably priced, and in the best interest of the public as well as
the interest of efficient policing operations for the removal of such vehicles from public
streets; and
WHEREAS, the selection of the franchisees shall be done through a competitive
process, and the City issued a Request for Qualifications (RFQ) to solicit interested tow
truck operators to enter into a franchise agreement with the City to provide rotational
police towing and storage services, and
WHEREAS, the City conducted a franchise fee cost analysis for the police towing
program to establish the appropriate fee schedule; and
WHEREAS, the tow franchises granted by the City Council shall pay to the City
franchise charges and fees as may be determined by this Resolution of the City
Council.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. Pursuant to Ordinance No. 2014 -1322, hereby award towing
franchises to the following five (5) qualified tow truck companies for the Lake Elsinore
Police Department's rotational tow program: Steve's Towing, Lear Autobody & Towing,
Brother's Towing, Town & Country Towing and United Towing Services.
SECTION 2. That it hereby establishes a graduated franchise fee schedule for
all selected tow franchisees that starts at a flat fee of $1,000 in Year 1 of the franchise
and increases by $1,000 at the beginning of each fiscal year thereafter to $4,000 in
Year 4 of the franchise agreement.
SECTION 3. Authorize the Mayor and staff to execute Tow Operation Franchise
Agreements with the selected franchisees, for a period not to exceed 4 years, and
subject to final review and approval by the City Attorney.
SECTION 4. This Resolution shall take effect and be in force as of
August 4, 2014 for a term not to exceed four years with the option for a two -year
extension.
PASSED, APPROVED AND ADOPTED on this 22nd day of July 2014.
Natasha Johnson, Mayor
ATTEST:
Virginia J. Bloom, City Clerk
APPROVED AS TO FORM:
Barbara Zeid Leibold, City Attorney
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE SS
CITY OF LAKE ELSINORE
I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby
certify that Resolution No. 2014- was adopted by the City Council of the City of Lake
Elsinore at a regular meeting held on the 22nd day of July, 2014 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Virginia J. Bloom, CMC
City Clerk
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CITY TOW OPERATION FRANCHISE AGREEMENT
I. PARTIES AND EFFECTIVE DATE
This CITY TOW OPERATION FRANCHISE AGREEMENT ( "Agreement ") is made
between the CITY OF LAKE ELSINORE, a California municipal corporation with offices
located at 130 South Main Street, Lake Elsinore, California 92530. ( "City "), and
,a
California located at
( "Franchisee "). City and Franchisee ar e
references to City include its elected
licensed to conduct business in the State of
Lake Elsinore, California
sometimes collectively referred to as "Parties." All
officials, officers
volunteers. All references to Franchisee include its
contractors.
directors, employees, agents, and
personnel, employees, agents, and
This Agreement is dated 20 for reference purposes only. This
Agreement will not be effective until the date on which this Agreement has been executed by the
Parties, authorized officials ( "Effective Date "). This Agreement supersedes any prior written
agreement between the Parties.
II. RECITALS
A. Franchisee is a [insert type of business entity].
B. Pursuant to California Vehicle Code section 12110(b), City has the authority to
grant franchises to companies that provide certain police towing services and to collect a fee in
connection therewith, provided the fee does not exceed the amount necessary to reimburse the City
for its actual and reasonable costs incurred in connection with administering its police towing
program.
C. On 201_, pursuant to Resolution No. , the City granted
to Franchisee a non - exclusive franchise for City tow operations in accordance with Lake Elsinore
Municipal Code Chapter 12.14 ( "Chapter 12.14 ").
D. The purpose of this Agreement is to: (i) set forth the rights and responsibilities of
the Parties with respect to a non - exclusive franchise for towing operations; (ii) prescribe the basic
regulations for the operation of the City of Lake Elsinore ( "City ") and Lake Elsinore Police
Department ( "Police Department ") towing service in emergency situations and in the removal of
vehicles that are abandoned, involved in an accident, or constitute an obstruction to traffic because
of mechanical failure, and; (iii) in accordance with Chapter 12.14, provide a fair and impartial
means of distributing requests for towing services among qualified franchises, and to ensure that
such service is prompt and reasonably priced, and in the best interests of the public as well as the
interest of efficient policing operations for the removal of such vehicles from public streets.
E. The City hereby engages Franchisee to provide Towing Services as provided
herein. Franchisee shall have, throughout the term of this Agreement, the nonexclusive right to
engage in the business of providing towing services to the City within the boundaries of City as
they now exist, and within any territory the City hereafter annexes, except to the extent that towing
services within such territory annexed would be unlawful or violate the legal rights of another
person. Franchisee acknowledges that the City places no maximum on the number of City -
generated tows that Franchisee may be required to provide in any time period, the City is not
obligated to provide Franchisee with a minimum number of City - generated tows during any time
period.
III. TERMS
1.0 Municipal Code Incorporated. The terms of Chapter 12.14 are hereby
incorporated by this reference. To the extent that the provisions of this Agreement are
inconsistent with or vary from the requirements set forth in Chapter 12.14, the terms of Chapter
12.14 shall control.
2.0 Franchise Fees.
2.1. Franchisee shall pay to the City franchise charges and fees as determined
by resolution of the City Council.
2.2. 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 Agreement are no longer assessable
due to a subsequent change in federal, state or local law.
3.0 Rotation system.
3.1 Franchisee shall provide towing service to the City pursuant to the rotation
system established by the Chief of the Police Department (the "Police Chief"). All operators on
the rotation list shall be required to be in compliance with Chapter 12.14. The City may request
services from a franchised tow truck operator who is not on -call or who is not franchised under
Chapter 12.14 in emergencies when the Police Chief or City Manager deems an emergency to
exist.
3.2 Franchisee may be required by the Police Chief to contract with an approved
telephone answering service at their sole cost and expense. If so required, this answering service
will be responsible for rotating the franchised tow truck operators according to the rotation system
established by the Police Chief.
4.0 Rates
4.1 Franchisee shall not charge rates greater than 115 percent of the schedule of
rates for towing established by the California Highway Patrol (CHP) for the Riverside County
Area. Such rates are determined by a competitive bid process and updated annually by CHP. As
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they are updated, the new rates will become the rates applicable under this Agreement. If the state
highway patrol does not update fees yearly, the City may grant a yearly cost of living increase in
accordance with the Consumer Price Index (CPI) established 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 Police Chief. The Police Chief shall review the request and make
recommendations to the City Council as to whether or not increases should be granted.
4.2 The rate for towing shall be from portal to portal at a one hour minimum.
Charges in excess of one hour may be charged in fifteen minute increments. There shall be no
additional charges for mileage, labor, etc. Secondary towing requests by the customer may be
negotiated by the official police towing service in accordance with his /her private business
practices.
4.3 Rates for service calls (out of gas, lock outs, etc.) shall be from portal to the
end of the service, and may be at the hourly rate with a thirty minute minimum. Charges in excess
of thirty minutes may be charged in fifteen minute increments.
4.4 The total fees added for afterhours release shall be no more than one -half
the hourly rate, and shall only be allowed if there is no person available at the storage facility for
release and a call back is required.
4.5 Storage fees shall be charged by calendar day except that vehicles stored
eight hours or less shall be charged no more than one day storage.
4.6 Maintain a sign listing the rates and charges for all towing and storage
services offered. The schedule of rates charged by Franchisee shall be posted in the lobby of the
tow truck companies. Additionally, rates shall be made available upon demand to persons for
who the tow services were provided or his /her agent.
4.7 When a stored vehicle is not released and Franchisee disposes of the vehicle
by a lien sale or junk slip, a copy of the lien sale document or junk slip will be submitted to the
Office by Franchisee in lieu of the payment receipt /invoice normally received.
5.0 Conditions on Franchises. Pursuant to this Agreement, Franchisee shall:
A. Provide adequate storage for a minimum of twenty -five vehicles within City
boundaries in accordance with the following standards of performance. If
it is determined that twenty -five spaces is inadequate, the Police Chief may
raise the minimum standard of spaces. This discretion applies to a specific
Franchisee, since the actual capacity of each Franchisee will vary in
accordance with the volume of overall business associated with each
Franchisee;
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B. Vehicles are to be stored at properly zoned storage facilities within City
limits. The storage facility must be manned twenty -four (24) hours a day
if it is at a location other than the primary place of business.
C. The view to all automobiles in the lot must be obstructed from the roadway.
No vehicles shall be left parked or stored on the public streets at any time.
D. Each stored vehicle shall be a minimum of two and one -half feet from any
other vehicle, structure or object.
E. All stored vehicles shall be reasonably accessible to the vehicle's owner or
vehicle's owner /agent and the Police Department for retrieval, inspection
and /or identification. Vehicle owners shall be able to retrieve a stored
vehicle within a reasonable period not to exceed one (1) hour.
F. At the request of the Police Department, the franchisee shall
waive /reimburse the registered/legal owner of any vehicle towed pursuant
to this section.
G. Franchisee is responsible for the reasonable care, custody, and control of
any property contained in towed or stored vehicles. Vehicles stored outside
shall be within an enclosed area with a minimum of a six -foot high fence
topped with wire or some other security device. Security shall be adequate
to preclude theft, vandalism, or damage by activity while in the Franchisee's
establishment.
H. Respond to Police Department calls 24 hours a day, seven days a week,
within 20 minutes or another maximum response time as established by the
Police Chief. Franchisee will advise the Police Department dispatch, at the
time of notification, if they are either unable to respond or unable to meet
the maximum response time. If, after accepting the call, the Franchisee is
unable to respond or will be delayed in responding, the Franchisee shall
immediately notify Central Dispatch. In the event of a delay, the Police
Department has the authority to elect to contact another franchisee for
service. Franchisee shall not assign calls to other franchises and shall not
respond to a Police Department call assigned to another Franchisee unless
requested to do so by the Police Department. There may be times when a
driver, who was not called to a scene, comes upon a collision scene where
a vehicle or vehicles are blocking a roadway and a Police Officer requests
his /her assistance in clearing the roadway. In such a case, the driver may
be requested to move the vehicle to a safe location, as directed by the
Officer, and leave it. There shall be no charge for this assistance, and the
assistance provided shall not change the Franchisees' place in the rotation.
in
I. The Police Department may, at is sole discretion, contact the next tow
operator on the rotation list when the Franchisee:
1. Fails to answer the phone;
2. Is unable to provide a service;
3. Is unable to respond; or
4. Is canceled due to excessive responsive time.
J. 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,
Franchisee may also affix temporary markings on the car windshield.
K. Not release any vehicles ordered towed by the Police Department unless
released at the direction of the Police Department. The Police Department
will provide Franchisee with appropriate regulations including updates to
these regulations as they occur.
L. When called from the rotation list by the Police Department, respond to the
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. Additionally, the tow operator will provide cleanup
services at traffic collision sites excluding biohazard materials.
M. Furnish each owner of an automobile impounded by the tow truck operator
with a fully itemized billing.
N. Record their time "in" and their time "out" on every tow truck assignment.
Such records shall be available and open to Police Department examination.
O. Not respond to any rotational call with a tow truck that has not been
inspected by the California Highway Patrol. All new tow truck vehicles
shall be inspected before being placed into service. The designated agency
(California Highway Patrol) may conduct inspections without notice during
normal business hours.
P. Have a schedule of rates available upon demand in all vehicles at all times.
Q. Have an attendant on call capable of responding to Police Department
requests for towing services, twenty -four hours a day, seven days a week.
An answering service may fulfill this requirement.
R. Maintain minimum operating hours for storage facilities of Monday through
Friday, 8:00 a.m. to 5:00 p.m., except holidays.
S. The Police Department reserves the right to inspect all drivers, vehicles and
their mechanical condition, 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 Franchisee. Franchisee is
responsible for arranging an annual vehicle inspection to the extent required
by the California Highway Patrol. 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.
T. Obtain and produce upon request proof of Workers' compensation,
Commercial liability and Commercial automobile /truck insurance of not
less than $1,000,000 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.
U. All vehicles stored or impounded as a result of towing services requested
by the Police Department or City, shall be made available to the owner of
these vehicles or his representative, an authorized insurance agent,
insurance adjustor, or body shop or car dealer, for the purpose of estimation
or appraising damages, except vehicles with a Police Hold /Impound.
V. All vehicles stored or impounded as a result of tow services regulated by
the City or Police Department shall be towed directly to an official storage
facility unless the Police Department or other person legally in charge of
the vehicle requests that it be taken to some other location.
W. Upon approval of the Police Department, Franchisee 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. Franchisee may charge an afterhours
release fee for property released after normal business hours.
X. Equip all towing vehicles 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.
Y. Comply with all applicable federal, state and local regulations for providing
towing service.
I
Z. Submit a report regarding response time statistics for all franchise tows if
requested to do so by the Police Department along with other related
information as may be requested.
AA. While providing Towing Services pursuant to this Agreement, Franchisee
and /or its employees or agents shall not engage in any misconduct,
including, but not limited to, any of the following:
1. Rude, offensive or discourteous behavior;
2. Lack of service, selective service, refusal to provide service which
the Franchisee is capable of performing;
3. Discrimination based upon on creed, sex, race, national origin, or
any other classification prohibited by state or federal law;
4. Unsafe or unlawful driving practices; or
5. Exhibiting any objective symptoms of drug or alcohol use including,
but not limited to, arriving at a tow scene with alcohol on their
breath.
BB. Take prompt and appropriate steps to resolve any third party complaints
arising from or related to services provided pursuant to the Agreement.
6.0 Tow Truck Classifications
6.1 Franchisee shall equip and maintain a minimum of three tow truck(s), with
a total vehicle capacity of four vehicles. Tow trucks must be in like -new appearance and tow
operators shall equip and maintain tow trucks covered under this Agreement within the provisions
set forth in the California Vehicle Code, Title 13 of the California Code of Regulations, the
specifications contained herein, and in a manner consistent with industry standards and practices.
6.2 The four classes of tow trucks covered by this Agreement include:
A. Class A - Light Duty. A tow truck with a manufacturer's Gross
Vehicle Weight Rating of 10,000 to 19,500 pounds with wheel lift
capability, and may have a car carrier. A tow truck company who
had a car carrier may be exempted from the wheel lift capability
requirements. However, the car carrier must an additional unit.
B. Class B- Medium Duty. A tow truck with a manufacturer's Gross
Vehicle Weight Rating of 19,501 to 33,000 pounds. The truck shall
be capable of providing air to the towed vehicle's brakes. A tow
truck company may also have a car carrier. However, the carrier
must be an additional unit.
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C. Class C -Heavy Duty. A tow truck with a manufacturer's Gross
Vehicle Weight Rating of at least 33,000 pounds. The truck shall
be equipped with air brakes and must be capable of providing air to
the towed vehicle's brakes.
D. Class D -Super Heavy Duty. A tow truck with a manufacturer's
Gross Vehicle Weight Rating of at least 50,000 pounds. The truck
shall be equipped with air brakes and must be capable of providing
air to the towed vehicle's brakes.
6.3 To properly and safely tow and service the wide variety of vehicles being
operated on the highway, a towing procedure may require the use of auxiliary equipment
specifically designed for the purpose. The specifications required by the California Highway
Patrol will be required for all classes of equipment.
7.0 Transfer or Assignment of Franchise. 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 Manager. The City `s approval of a
transfer or assignment of a franchise granted pursuant to this Agreement shall be conditioned upon
Franchisee's sale or disposal of all ownership rights in the franchised tow truck business. If
Franchisee desires to transfer or assign its franchise tow truck business because Franchisee intends
to sell or dispose of all interests in the franchise tow truck business, the Franchise shall make a
written request to the City Manager for a transfer or assignment of the franchise at least 120
calendar days before the requested effective transfer or assignment date. The Police Department
shall investigate the proposed transferee or assignee and determine whether they are qualified to
serve as a tow truck operator franchisee pursuant to the criteria and requirements set forth in the
City's Municipal Code. If the Police Department determines that the proposed transferee or
assignee is qualified to be a tow truck operator franchise, the Police Department shall recommend
that the City approve the transfer or assignment. Any attempt to sell, transfer, lease, assign or
otherwise dispose of the franchise without the prior consent of the City Manager shall be null and
void.
8.0 Term. The term of this Agreement shall be for a period of four (4) years from the
Effective Date (the "Initial Term ").
9.0 Agreement Extension. This Agreement shall automatically renew at the sole
and absolute discretion of the City for two (2) additional years unless written notice of cancellation
has been provided to the Franchisee by the City at least six (6) months prior to the expiration of
the Initial Term.
10.0 Cancellation, Suspension and Revocation of Franchise.
10.1 The City and Police Department reserves the right to cancel this Agreement
for any reason, and in its sole and absolute discretion, by providing Franchisee with thirty (30)
days written notice of cancellation. The City also reserves the right to revoke or suspend the
franchise granted pursuant to this Agreement and to rescind all rights and privileges associated
with it at any time if:
A. Franchisee defaults in the performance of its material obligations
under this 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). This includes nonpayment of any City
business license or any other fees provided in this Agreement; or
B. Franchisee is habitually late, habitually fails to respond, frequently
make notification of an inability or unwillingness to respond, or
selectively make notifications of an inability or unwillingness to
respond to certain tows; or
C. Franchisee fails to provide or maintain in full force and effect the
insurance coverage as required by this Agreement; or
D. Franchisee violates any order or ruling of any regulatory body
having jurisdiction over Franchisee relative to Franchisee's tow
truck business, unless such order or ruling is being contested by
Franchisee by appropriate proceedings conducted in good faith. This
includes failure to comply with the Lake Elsinore Municipal Code;
or
E. 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
F. Franchisee becomes insolvent, unable or unwilling to pay its debts
and obligations, or is adjudged to be bankrupt. The City's revocation
of this Agreement shall in no way affect any right of the City to
pursue any remedy under the franchise or any other provision of law;
or
G. Franchisee breaches any rule, regulation or condition as provided in
this Agreement; or
H. Franchises fails to maintain a satisfactory level of service to the
Police Department, such as a maintaining a high standard of
customer relations and professionalism; or
I. Violation of any federal, state or local law by the contract holder,
franchisee or any person having any ownership interest in the
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official police tow service or any employee of the official police tow
service.
10.2 Prior to revoking or suspending a franchise granted under this Agreement,
City or the Police Department shall give Franchisee notice and an opportunity to be heard on the
matter, in accordance with the following procedures:
A. The City shall first notify Franchisee of the violation in writing by
personal delivery or registered or certified mail, and demand that
Franchisee cure the default within a reasonable time, which shall not
be less than ten days in the case of Franchisee's failure to pay any
sum or other amount due to the City under this Agreement with the
City and 30 days in all other cases. If Franchisee fails to correct the
violation within the time prescribed or if Franchisee fails to
commence correction of the violation within the time prescribed, the
City shall give Franchisee fourteen (14) calendar days' written
notice of a hearing to be held before the City Manager or his
designee ( "Hearing Officer "). The written notice shall specify the
alleged violations supporting the recommendation for revocation of
the franchise.
B. The Hearing Officer shall hear and consider all relevant evidence
submitted by staff and Franchisee or its agent or representative.
The Hearing Officer shall not be limited by the technical rules of
evidence, but may consider any evidence upon which a prudent
person might rely in arranging his or her own affairs. The Hearing
Officer may appear in person at the hearing or present a written
statement in time for consideration at the hearing. If the Hearing
Officer finds that Franchisee has committed a material breach under
this Agreement and that Franchisee has not corrected the violation
or has not diligently commenced correction of the violation after
receiving proper notice in accordance with this Agreement, the
Hearing Officer may revoke the franchise.
C. The Hearing Officer may impose such conditions and take such
other action as he or she deems appropriate under the circumstances
to carry out the purpose of this Agreement. If an interested party
makes a written presentation to the Hearing Officer but does not
appear, he or she shall be notified in writing of the decision.
D. Notwithstanding the City's right to revoke or suspend a franchise,
the Police Chief shall have the right to suspend, for a period not to
exceed ninety (90) days, any franchise granted pursuant to this
Agreement, and to rescind all rights and privileges associated with
it during the suspension period, if the Police Chief has reasonable
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cause to believe that Franchisee has engaged in fraudulent conduct
with respect to the performance of the towing services as provided
herein or that Franchisee's continued performance of towing
services as provided herein constitutes a potential endangerment to
the health or safety of the public.
E. The business owner may appeal the decision of the Hearing Officer
to the City Council within 15 days following service of the Hearing
Officer's decision.
11.0 Liability Insurance
11.1 Coverage. Throughout the term of this Agreement, Franchisee shall pay for
and maintain in full force and effect all policies of insurance required hereunder with an insurance
company(ies) either (i) admitted by the California Insurance Commissioner to do business in the
State of California and rated not less than "AN11" in Best's Insurance Rating Guide, or (ii)
authorized by City's Risk Manager. The following policies of insurance are required:
A. Commercial General Liability Insurance which shall be on the
most current version of Insurance Services Office (ISO)
Commercial General Liability Coverage F01 m CG 00 01 and
include insurance for "bodily injury," "property damage" and
"personal and advertising injury" with coverage for premises and
operations, products and completed operations, and contractual
liability (including, without limitation, indemnity obligations
under the Agreement) with limits of liability of not less than
$1,000,000 per occurrence for bodily injury and property damage,
$1,000,000 per occurrence for personal and advertising injury and
$2,000,000 aggregate for products and completed operations and
$2,000,000 general aggregate.
B. Garagekeepers Legal Liability Insurance which shall include
coverage for vehicles in the care, custody, and control of the
Franchisee with limits of liability of not less than $500,000 per
occurrence for property damage.
C. Commercial Automobile Liability Insurance which shall be on
the most current version of Insurance Service Office (ISO)
Business Auto Coverage Form CA 00 01, and include coverage
for all owned, hired, and non -owned automobiles or other
licensed vehicles (Code 1- Any Auto) with limits of not less than
$1,000,000 per accident for bodily injury and property damage.
D. On- Hook/Cargo Insurance which shall include coverage for
vehicles in tow with limits of liability based on the size of the
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tow truck, which are as follows:
1.
Class A tow truck
$50,000
2.
Class B tow truck
$100,000
3.
Class C tow truck
$200,000
4.
Class D tow truck
$250,000
E. Workers' Compensation Insurance as required under the
California Labor Code.
F. Employers' Liability Insurance with minimum limits of $1,000,000
each accident, $1,000,000 disease policy limit and $1,000,000
disease each employee.
11.2 Policy Endorsement. Every policy and every certificate of motor vehicle
liability insurance coverage filed pursuant to the provisions of this Agreement shall contain the
following endorsements:
A. It is hereby understood and agreed that, notwithstanding expressions
or provisions inconsistent with, or contrary thereto in this policy
contained, the policy is expressly issued to cover a motor vehicle
regulated by the provisions of Chapter 12.14 of the City of Lake
Elsinore Municipal Code. This policy shall inure to, and be for the
benefit and protection of, each person who shall sustain any
damages or injury, or to the heirs, personal representatives,
administrators, executors or assigns of any such person who may be
so damaged or injured, to suffer death by reason of the operation of
a motor vehicle covered by this policy or from the defective
conditions thereof. Liability under this policy shall be in no
manner abrogated or abated by the death of the tortfeasor or the
insured.
B. This is a continuing liability for claims incurred up to the full
amount hereof, notwithstanding any action or recovery thereon.
C. No cancellation or reduction of coverage of this policy for any
reason whatsoever shall become effective until the expiration of
thirty days after written notice of such cancellation or reduction in
coverage shall have been given in writing to the City's Risk
Manager. The thirty day period shall commence upon the date the
notice is actually received in the office of the City's Risk Manager
if personally delivered, or, if given by registered United States mail
with return receipt requested, in the second business day after the
notice is deposited in the United States mail, postage prepaid or on
the date of receipt shown on the return receipt, whichever is later.
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D. The City of Lake Elsinore and Lake Elsinore Police Department
shall be listed as "Also Insured."
12.0 Additional Services to be Provided. Franchisee shall provide to the City, at no
charge, the services needed to facilitate the City's Vehicle Abatement Program. Additionally, the
Franchisee will provide emergency response to aid and service City and Police Department
vehicles that are one ton or less, within a reasonable radius of the City, at no cost to the City or
Police Department.
13.0 Additional Franchises. The franchise granted herein shall be not be exclusive;
however, notwithstanding the foregoing, any new tow franchise granted by the City following the
Effective Dates shall, during the Initial Term, be subject to substantially the same terms and
conditions as set forth herein.
14.0 Indemnity. Franchisee agrees to protect, indemnify, defend and hold harmless the
City and the Police Department 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.
15.0 Severability. If any provision, clause, sentence or paragraph of this Agreement or
the application thereof to any person or circumstance shall be held invalid, such invalidity shall
not affect the other provisions of this Agreement and are hereby declared to be severable.
Dated:
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
CITY OF LAKE ELSINORE, a municipal
corporation
In
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Mayor
[Insert Franchisee]
Dated: By:
Its:
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