The Morgan Hill City Council voted to implement a city-owned
impound yard despite objections from private companies worried
about their staff and profit margins.
The Morgan Hill City Council voted to implement a city-owned impound yard despite objections from private companies worried about their staff and profit margins.
The program will allow the Morgan Hill Police Department to store vehicles that are subject to a 30-day impound, primarily because their owners have been suspected of driving without a license or with a suspended license, according to Police Cmdr. David Swing. It will provide about $430,000 annually, which will eventually fund a new officer’s position, said Swing, who prepared a staff report on the proposal. Currently, the city has a contract with four local towing companies to store impounded vehicles, and storage fees are paid to those companies by the cars’ owners.
Police will charge vehicle owners daily storage fees while their cars are impounded, and sell vehicles that are not retrieved after 30 days. The daily rate recommended by police is $56.
At Wednesday’s city council meeting, the owners of three local companies addressed the council on the accuracy of the staff report and the likely loss of business a city-run impound yard would cost them.
Dion Bracco of Bracco’s Towing and Transport said the program would drop his income by $3,000 to $5,000 per month. He added the city’s staff report, which predicted an average of $200,000 in profits for each of the first four years, is overly optimistic.
“There are no negatives in there,” Bracco said. “What if their assumptions are wrong? Where are they getting their numbers? There are no numbers to back up their claim.”
The city of Colton, which is cited in the MHPD staff report as an example of a similar program, regularly ran a deficit on its impound yard, Bracco said.
Bill Miner, owner of California Tow Company, said it was inappropriate for the city to cut tow companies potentially in half based on a poorly researched plan.
“I don’t know what we’re trying to achieve here,” he said, calling the land up for purchase an “unacceptable lot that will not pass any state regulations whatsoever.”
The city-run program will cost the city an initial $365,000 – including property purchase and improvements – to implement an impound program, Swing said.
“We are an understaffed department and we’re looking for creative ways to recover costs for services that will allow us to increase our staffing – and this is one of the ways to do that,” Swing said prior to the meeting. He noted that in some cities in southern California, similar programs have been successful for more than a decade.
The city would collect about $350,000 per year in storage fees and about $80,000 from the sale of unclaimed vehicles, according to the staff report.
“The figures were taken from the tow companies themselves, (showing) how long (impounded) vehicles typically stay in their custody,” Swing said. “We feel these are accurate numbers.”
Since 2006, police have impounded an average of 418 cars per year, according to the report.
The program will create a new traffic safety fund, where all revenue will be kept and which will pay for a new officer’s position as well as other initiatives to promote road safety.
The initial costs will consist of the $200,000 purchase of about a half-acre of property next to the police station on Vineyard Boulevard, according to the report.
The impound yard’s proximity to the station, and the use of a closed circuit security video system will provide adequate security, Swing said. Remaining start-up costs will include about $165,000 for site improvements such as fencing and grading. The city’s reserves will fund the startup costs.
The storage yard will eventually be run by a traffic corporal, according to the report. Annual personnel costs would amount to about $89,000 by the fourth year.
The program could be implemented by December 2009, Swing said.
