HomeMy WebLinkAboutSS2 - Police Tow Truck Service AgreementCITY OF NEWPORT BEACH
STUDY SESSION STAFF REPORT
SS#2
February 12, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Revenue Division, Administrative Services
Glen Everroad, Revenue Division Manager
949 -644 -3144
Everroad(cDcity. newport- beach.ca.us
Revenue Division, Administrative Services
Evelyn Tseng, Income Contract Administrator
949 -644 -3153
ETseng(a)city. newport- beach. ca. us
SUBJECT: Renewal of the Official Police Tow Truck Service Agreements
ISSUE:
Staff intends to renew the two Official Police Tow Truck Service Agreements pursuant to the
terms of its current provisions such that the termination date for both Agreements shall be April
30, 2013.
DISCUSSION:
Background:
In 2003, the City determined that there should be two official police tow operators to provide
towing services at the request of the Newport Beach Police Department. The City advertised for
bids and two companies responded to the City's Request for Proposals — G &W Towing, a
California corporation, and Harbor Towing, Inc., a California corporation. After a careful
analysis including inspection and investigation of both companies' facilities, reputation, history
and proposals, the City entered into a five year agreement with both on May 1, 2003.
From May 1, 2003 through the present, G &W Towing and Harbor Towing have performed the
services required by the Tow Truck Service Agreements and Chapter 5.15 of the City's
Municipal Code to the City's satisfaction. They have been responsive to the Police Department
requests for service, have complied with the provisions of their Tow Truck Service Agreements
and have provided services in excess of the requirements of the Agreements.
Section 11 of the Agreements require the operators to pay a contract services fee of ten percent
(10 %) of its gross receipts to the City. For FY 06/07, the two towing companies paid a
combined amount of $86,540.28 to the City. Although not required by the Agreements, both
operators voluntarily initiated a program to collect unpaid parking citations owed the City's with
Renewal of Police Tow Truck Service Agreements
February 12, 2008
Page 2
the release of impounded vehicles. This program has eliminated the need for impounded
vehicle owners to appear at City Hall to pay their citations prior to securing their vehicles,
reducing storage charges for customers and resulting in the collection of 1,255 parking citations
worth $91,368 last year.
The initial term of the Agreements expires April 30, 2008. Both agreements give City the right to
renew the Agreements for one additional 5 -year term.
Both companies have complied with the provisions of their respective Agreements and the
Police Department has been satisfied with their performance. Staff has no reason not to renew
the Agreements, nor can we justify the time and cost of another RFP.
Prepared by:
SIGNATURE
Submitted by:
SIGNATURE
1
EvelyA Tseng, InQpffie Contract Administrator GI rroad, Revenue Division Manager
Attachments: Official Police Tow Truck Service Agreement by and between the City of Newport
Beach and G &W Towing, a California corporation, dated May 1, 2003; and
Official Police Tow Truck Service Agreement by and between the City of Newport
Beach and Harbor Towing Inc., a California corporation, dated May 1, 2003.
OFFICIAL POLICE TOW TRUCK
SERVICE AGREEMENT
This AGREEMENT is made and entered into this first day of May, 2003 by and between
the CITY OF NEWPORT BEACH, a municipal corporation (hereinafter referred to as "City ")
and HARBOR TOWING INC., a California corporation whose address is 957 West 17th Street,
Costa Mesa, CA 92627 (hereinafter referred to as "Operator "), and is made with reference to the
following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the
laws of the State of California with the power to carry on its business as it is
now being conducted under the statutes of the State of California and the
Charter of the City.
B. Chapter 5.15 of the Newport Beach Municipal Code regulates the operation of
official police towing services, which are used in police emergency situations
and for the removal of vehicles that are apparently abandoned, involved in an
accident, or that constitute an obstruction to traffic because of mechanical
failures.
C. Section 5.15.080 provides that tow truck companies that are selected as
"official" police tow service providers pursuant to the City's established
bidding process are required to enter into an agreement with the City that
outlines their duties and obligations and that contains eligibility requirements,
operating regulations and a fee schedule as adopted by the City Council.
D. By designating specific companies as police tow service providers, City desires
to ensure the availability of prompt, efficient and reliable police towing services
within the City of Newport Beach.
E. The City Council of the City of Newport Beach has selected Harbor Towing Inc.
to operate as one of the City's "official" operators to provide tow service at the
request of the Police Department throughout the City.
F. City and Operator desire to enter into this Agreement wherein Operator agrees
to perform police towing services for the City under the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the undersigned parties agree as follows:
L TERM
The term of this Agreement shall be for five (5) years, and shall commence on the first
day of May 2003, and shall terminate on the 30th day of April 2008, unless terminated earlier as
set forth herein. The City reserves the right, upon sixty (60) days written notice, to renew this
Agreement for an additional five (5) -year term provided that Operator's performance is deemed
acceptable, and that the renewal is agreeable to the Operator.
2. SERVICES TO BE PERFORMED BY OPERATOR
Operator agrees to operate as one of the City's "Official" Police Tow Services pursuant
to the terms of this Agreement and in conformity with the requirements and Rules of Operation
contained in Chapter 5.15 of the Newport Beach Municipal Code, which by this reference is
incorporated herein.
3. RATE SCHEDULES
Operator shall charge the rates for services as set forth in the rate schedule attached
hereto as Exhibit "A," which is incorporated herein by this reference.
The rate schedule will automatically be adjusted on its anniversary date based on the
percentage change in the cost of doing business as measured by the United States Department of
Labor, Bureau of Labor Statistics, Consumer Price Index, for all Urban Consumers for the Los
Angeles -Long Beach - Anaheim Area, All Items, (1967 =100) for the preceding twelve (12)
months. Operator shall provide a listing of the rates to be charged. However, the City may
require and revise the fee schedule by mutual agreement at any time upon a finding that a rate
adjustment is justified.
Operator shall charge the City no more than twenty -five percent (25 %) of the charge set
forth in Exhibit "A" for storage of vehicles ordered impounded by the Police Department that
involve evidence, as described in Paragraph 9 (B) of this Agreement.
4. STANDARD OF CARE
Operator warrants and guarantees that all services performed hereunder shall be provided
in a manner commensurate with the highest professional standards and shall be performed by
qualified, licensed and experienced personnel.
5. INDEPENDENT CONTRACTOR
The parties of this Agreement intend that the relationship between them created by this
Agreement is that of City - independent contractor. The manner and means of conducting the
work are under the control of the Operator, except to the extent limited by statute, rule or
regulation and the express terms of this Agreement. No civil service status or other right of
employment will be acquired by virtue of the Operator's services. None of the benefits provided
by the City to its employees, including but not limited to unemployment insurance, workers'
compensation insurance, retirement and deferred compensation plans, vacation and sick leave,
are available from City to Operator, its employees or agents.
6. HOLD HARMLESS .
Operator shall indemnify, defend and hold harmless City, its City Council, boards and
commissions, officers, agents, servants and employees from and against any and all loss,
damages, liability, claims, suits, costs and expenses for damages of any nature whatsoever,
including, but not limited to, bodily injury, death, personal injury, property damages, or any other
claims arising from any and all negligent acts or omissions of Operator, its employees, agents or
subcontractors which arise out of or result from, or occur in connection with Operator's
performance of services pursuant to this Agreement or Chapter 5.15.
7. INSURANCE
Without limiting the indemnification provided in Section 6 above, Operator shall obtain
and maintain throughout the term of this Agreement, at Operator's sole cost and expense,
insurance against claims for injuries to persons or damages to property which may arise from or
in connection with the services provided by Operator under this Agreement. On or before the
commencement of the term of this Agreement, Operator shall furnish the City with certificates
showing the type, amount, class or operations covered by such insurance, and the effective dates
and dates of expiration of such insurance policies. Such certificates 'shall also contain
substantially the following statement: "The insurance covered by this certificate will not be
canceled or materially altered, except after thirty (30) days written notice has been received by
the City."
All insurance policies shall be issued by an insurance company currently authorized by
the Insurance Commissioner to transact the business of insurance in the State of California, with
an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Bests Key Rating Guide, unless otherwise
approved by the City Risk Manager. The polices required are as follows:
A. Commercial Liability: Operator shall obtain and maintain at all times during the
term of this Agreement comprehensive general commercial liability insurance covering third -
party liability risks in a minimum amount of $1,000,000 combined single limit per occurrence for
bodily injury, personal injury and property damage.
B. Automobile Liabilitv: Commercial automobile liability and property insurance
covering any vehicles owned, leased, hired or borrowed by Operator in a minimum amount of $1
million combined single limit per occurrence for bodily injury and property damage, and shall
include sudden and accidental coverage.
C. Workers Compensation: Operator shall maintain full Worker's Compensation
Insurance for all persons for whom it employs in accordance with the requirements of the most
current and applicable State Workers' Compensation Insurance laws in effect
D. Subrogation Waiver: Operator agrees that in the event of loss due to any of the perils .
for which it has agreed to provide insurance, that Operator shall look solely to its insurance for
recovery. Operator hereby grants to City, on behalf of any insurer providing insurance to either
Operator or the City with respect to the services of Operator herein, a waiver of any right of
subrogation that any such insurer of said Operator may acquire against City by virtue of the
payment of any loss under such insurance.
E. Additional Insured: The City, its City Council, boards and commissions, officers,
agents, servants and employees shall be named as an additional insured on all policies of
insurance required by this Agreement. The naming of an additional insured shall not affect any
recovery to which such additional insured would be entitled under this policy if not named as
such additional insured and an additional insured named herein shall not be held liable for any
premium or expense of any nature on this policy or extension thereof. Any other insurance held
by an additional insured shall not be required to contribute anything toward any loss or expense
covered by the insurance provided by this policy. Proceeds from any such policy or policies
shall be payable to the City primarily, and to the Operator secondarily, if necessary.
F. Operator agrees that if any policy of insurance required by this Agreement is not
maintained in full force and effect, the City Manager may, in his sole discretion, suspend this
Agreement, immediately, until such time as the required insurance is in effect and the required
certificates and endorsements are delivered to the City.
8. PROMBMON AGAINST TRANSFER
Operator shall not assign, sublease, hypothecate or transfer this Agreement or any
interest therein directly or indirectly, by operation of law or otherwise, without the prior written
consent of City. Any attempt to do so without the consent of the City shall be null and void, and
any assignee, subleasee, hypothecatee or transferee shall acquire no right or interest by reason of
such attempted assignment, hypothecate or transfer.
The sale, assignment, transfer or other disposition of any of the issued and outstanding
capital stock of Operator, or of the interest of any general partner or joint venture or syndicate
member or cotenant, which shall result in change in the control of Operator, shall be construed as
an assignment of this Agreement. Control means fifty percent (50 %) or more of the voting
power of the corporation, partnership, joint venture, syndicate, or cotenancy.
9. STORAGE OF VEHICLES
(A) The Operator shall store all impounded vehicles, together with all accessories,
equipment and personal property located on or in each vehicle, in City- approved storage
facilities.
(B) Vehicles taken into custody that involve evidence shall be stored in a secure area
and under conditions approved by the Police Department. The storage area shall be protected
against access by persons not authorized by the police. The Operator will be required to take all
reasonable precautions required by the Police Department to avoid damage to any evidence,
such as fingerprints, stains, etc.
(C) The Operator agrees to maintain storage facilities as required by Section
5.15.110 for vehicles ordered impounded by the Police Department. The Operator shall take
any and all measures necessary to prevent theft or damage to such vehicles and the
accessories, equipment or other personal property in them while stored in his storage facility.
(D) Operator agrees to waive towing and/or storage fees when reasonably requested
by any police supervisor of the rank of Sergeant or above, or by the Traffic Civilian Supervisor.
Such requests generally shall be limited to the towing of city vehicles, the towing and storage of
other vehicles as a result of mistake or error by city employees, or vehicles impounded during the
course of carrying out an official police investigation.
10. PERMITS AND LICENSES
Operator, at its sole expense, shall obtain and maintain during the term of this
Agreement, all appropriate permits, licenses and certificates that may be required in connection
with the performance of services provided hereunder.
11. CONTRACT' SERVICES FEE
As compensation for the costs incurred in connection with City's operation of this police
towing program, Operator shall pay quarterly to the City during the life of this Agreement, a
fixed percentage of the gross receipts it derives from services provided under this Agreement.
Such percentage shall be ten (10) percent of gross receipts. Proceeds from vehicles sold at lien
sale shall not be subject to this fee. Payment shall be due to the City no later than forty-five
(45) days after the expiration of each calendar quarter.
In the event that the above payment is not received by the City within the specified time
period, Operator shall pay to the City a one -time penalty of ten (10) percent of the amount due
and interest of one and one -half percent (1.5 %) per month on the unpaid balance.
Operator shall file with the City, within ninety (90) days after expiration of Operator's
fiscal year during which this Agreement is in force, a financial statement prepared by a
certified public accountant showing in detail the gross annual receipts from official police tow
operations in the City of Operator, or its successors and assigns, during the preceding fiscal
year.
The right is reserved to the City of audit and recomputation of any and all amounts due
under this Agreement, and no acceptance of any payment shall be construed as a release or as
an accord and satisfaction of any claim the City may have for further additional sums due
under this Agreement or for the performance of any obligation hereunder.
12. RECORDS
Operator shall maintain complete and accurate records with respect to all expenses,
receipts and other such information required by the City that relate to the performance of
services under this Agreement.
Operator shall maintain accurate records on services provided in sufficient detail to
permit an evaluation of service and income received therefrom. All such records shall be
maintained in accordance with generally accepted accounting principles and shall be clearly
identified and readily accessible to the City upon demand. Operator shall provide free access
to the Revenue Manager or his or her designees to such books and records during regular
business hours, and give the City the right to examine and audit same, and to make copies as
necessary, and to allow inspection of all work, data, documents, proceedings and activities
related to this Agreement. Such records, together with supporting documents, shall be kept
separate from other documents and records and shall be maintained for a period of three (3)
years after receipt of final payment. Operator shall reimburse City for City's costs in
performance of an audit if, as a result of the audit, it is determined that a discrepancy of ten
percent (10 %) or more of the contract service fees paid during the period reviewed is due.
Operator shall reimburse the City for such costs within thirty (30) days of the date the City
notifies Operator in writing of the amount of City's cost.
13. NOTICES
All notices, demands, requests or approvals to be given under this Agreement shall be
given in writing and shall be deemed served when delivered personally or on the second
business day after deposit in the United States mail, postage prepaid, registered or certified,
addressed as hereinafter provided.
All notices, demands, requests or approvals from Operator to City shall be addressed to
the City at:
Newport Beach City Hall
3300 Newport Beach Blvd., PO Box 1768
Newport Beach, California 92659 -1768
Attention: City Manager
With copy to:
Newport Beach City Hall
3300 Newport Beach Blvd., PO Box 1768
Newport Beach, California 92659 -1768
Attention: Revenue Manager
All notices, demands, requests or approvals from City to Operator shall be addressed to
Operator at:
Harbor Towing Inc.
957 West 17's Street
Costa Mesa, CA 92627
14. TERMINATION
The grounds for termination of this Agreement are set forth in Newport Beach Municipal
Code Section 5.15.140, and include breach of any terms of this Agreement. In the event
Operator has breached the terms of this Agreement or other grounds for termination exist, the
City shall provide written notice of the nature of the default and the steps necessary to cure the
default. If such default is not cured within a period of two (2) days after receipt by Operator of
written notice of default, this Agreement may be terminated by the City Manager by giving
written notice to the Operator. Notice that the Agreement has been terminated shall state the
reasons for termination.. Any appeal shall be to the City Council. The right to appeal shall
terminate fifteen (15) days following the date of personal service or deposit in the United
States mail of the notice of termination. The City Council may preside over the hearing on
appeal, or in the alternative, appoint a hearing officer to conduct the hearing and submit to the
City Council its finding and recommendations. The City Council shall render its decision
within forty -five (45) days of receipt of the hearing officer's findings and recommendations.
The decision of the City Council shall be final.
15. COST OF LITIGATION
If any legal action is necessary to enforce any provisions of this Agreement or for
damages by reason of an alleged breach of any provisions of this Agreement, the prevailing party
shall be entitled to receive from the losing party all reasonable attorneys' fees and costs.
16. COMPLIANCE WITH ALL LAWS
Operator shall comply with all laws, state or federal, and all ordinances, rules and
regulations enacted or issued by the City.
17. WAIVER
A waiver by the City of any breach of any term, covenant or condition contained herein
shall not be deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein whether of the same or a different character.
18. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or nature
whatsoever between the parties hereto and all preliminary negotiations and agreements of
whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall
be held to vary the provisions hereof. Any modification of this Agreement will be effective
only by written execution signed by both City and Operator.
The City hereby reserves every right and power, in the exercise thereof, which is
reserved or authorized by any provision of any lawful ordinance or resolution of the City,
whether enacted before or after the effective date of this Agreement. Neither the .decision to
select Operator as an "Official' Police Tow Service provider or any provision of this Agreement
shall constitute a waiver or a bar to the exercise of any governmental right or power of the City.
There is hereby expressly reserved to the City Council the power and authority
to amend any section of Chapter 5.15 of the Newport Beach Municipal Code as to require
additional or greater standards on the part of Operator.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
A].7ROVED AS TO FORM:
i
CrIYYTTORNEY
ATTEST:
QG4- - .&
Df7M q CITY CLERK
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