Storage and impound fees for vehicles towed by order of the Morgan Hill Police Department will soon rise, in order to offset the city’s increasing costs, according to city staff.
The Morgan Hill City Council approved the new fees April 4 as an update to the city’s “Two Franchise Agreements” with two local towing companies: Community Tow, and California Tow and Salvage.
Under the new towing agreements, the towing companies’ tow fee charges to vehicle owners will rise from $180 per hour to $225 per hour; the daily storage fee for vehicle owners will increase from $60 to $100; and the towing companies’ “franchise tow fee” paid to the city will rise from $97 to $128 per police-ordered vehicle towed.
The franchise tow fee is designed “to ensure 100 percent cost recovery” for the police department and its staff who order vehicles to be towed and process the related paperwork, according to MHPD Sgt. Carlos Guerrero.
In the last three years, MHPD has towed an average of 612 cars per year from local streets and properties. Police order parked vehicles to be towed when they are in violation of city ordinances, abandoned or illegally parked.
The fee increases will also “maintain consistency throughout the region,” reads a staff report by Guerrero.
Besides the franchise tow fee, the city also charges impounded vehicle owners $165 each to release their vehicle to them.
Morgan Hill’s franchise tow program was started in 2009, and was revised in 2011 to cut down on some of the labor costs involved in administering it, Guerrero added.
Since then, the city’s costs associated with towing and processing vehicles has risen, and the city has been losing money on towed vehicles.
In 2017, Morgan Hill Police recovered a total of about $113,300 in vehicle release fees ($165 each vehicle) and franchise tow fees ($97 per vehicle, paid by towing companies). But the city’s cost to administer the towing program is about $126,177, or about $206 per hour of staff time, according to Guerrero’s staff report. Staff positions involved in administering the program include sergeants, officers, dispatch and records personnel.
Thus, police calculated that a higher franchise fee of $128 would recover the difference in costs, and the council agreed.
Before 2011, the city was charging the franchised towing companies 20 percent of the revenue recovered from police-ordered tows. However, this required too much officers’ staff time, and that fee was changed to a flat rate of $97 per vehicle, Guerrero explained to the council.
