|
CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Report Date: |
February 28, 2005 | |
Author: |
Alena Straka | |
Phone No.: |
604.871.6683 | |
RTS No.: |
04903 | |
CC File No.: |
2801 | |
Meeting Date: |
March 15, 2005 |
TO: |
Vancouver City Council |
FROM: |
Chief License Inspector |
SUBJECT: |
Amendment to Vehicles for Hire By-Law No. 6066: Private Impoundment Towing Rate and Release Fee |
RECOMMENDATION
A. THAT Council approves an increase in the private impoundment towing rate to $68.50 and an increase in the release fee to $33.65, subject to the towing companies agreeing, in writing, to storage charges of $17.50 for the first 24 hours and $13.00 for each additional 24 hour period.
B. THAT subject to Council approval of the above, the Director of Legal Services prepare the necessary by-law amendments for the private impoundment towing rate and release fee.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A and B.
COUNCIL POLICY
Vehicles for Hire By-Law No. 6066: licenses and regulates the owners and drivers of vehicles for hire in the City of Vancouver.
PURPOSE
This report reviews the private towing impoundment rate, release fee and storage rate (not regulated under Vehicles for Hire by-law) recommending an increase of approximately 9.6% (when rounded) for towing impoundment and storage and 8.6% (when rounded) for the release fee. These increases are intended to assist the towing companies with their rising operating costs.
BACKGROUND
The City regulates the private towing impoundment rate and the release fee under Sections 22 (12) and (13) of Vehicles for Hire By-Law No. 6066. The by-law prescribes certain maximum fees that may be charged to the owner or driver of a vehicle that has been towed from a commercial lot pursuant to a tow-away notice or when the vehicle is claimed prior to being actually towed away (drop/release). Currently, the City has no power under the Vancouver Charter to regulate storage fees. Therefore, by-law amendments to the impoundment and release fees are approved only once the towing companies have agreed in writing to specific storage charges.
The last three impoundment rate and release fee increases approved by Council were in June 1993, December 1998 and October 2002.
DISCUSSION
All three licensed towing companies in the City, namely Busters Towing, Drake Towing and Unitow Services, submitted a request that City staff consider an increase in the rates for private impoundment and release and storage fees. The companies cited rising operating costs such as fuel, fleet maintenance costs, equipment upgrades and increasing personnel costs as the main reasons for their request. The table below presents the City of Vancouver's current impoundment, release fee and storage rates and the proposed corresponding rates as requested by each licensed towing company.
Type |
Current Rate |
Proposed Rate Increase | ||
Vancouver |
Busters Towing |
Drake Towing |
Unitow Services | |
Impoundment |
$62.50 |
$68.00 |
$70.78 |
7% - 12% |
Release Fee |
$31.00 |
$33.18 |
$37.38 |
7% - 12% |
24 hr Storage |
$16.00 |
$17.98 |
$18.00 |
7% - 12% |
Add. Days Storage |
$12.00 |
$13.00 |
$14.00 |
7% - 12% |
Note: GST not included in above fees.
In the past, the Vancouver Consumer Price Index (CPI) was used as a general measure for changes in the rate structure. The average rate increase in 1998 was 8.5% while the City experienced inflation (CPI) of approximately 6.4 %. Between 1998 and mid 2002, the City's inflation rate, as measured by Vancouver's CPI, was approximately 9.9%. The recommended rate increase of 10.5% was in line with inflation.
Between 2002 and 2004 , the City's inflation rate, as measured by Vancouver's CPI, was approximately 6.5%. All three towing companies have requested a rate increase higher than this rate of inflation because of rising operating costs and increased purchasing price of tow trucks. Although Vancouver's Consumer Price Index (CPI) has historically been used as the comparison measure for towing rate increases, this Index is a summary of all economic markets and industries over a certain period of time. Therefore the increases of the major factors of fuel, insurance and vehicle price which directly impact the towing business are so proportionately small that they are essentially hidden within the CPI. Thus staff have chosen to evaluate the regulated rate increases based on the towing industries three major factors, along with a comparison to other municipalities and ICBC rates.
Drake Towing has indicated the following operating cost increases going back to the summer of 2002: fuel up 40%; insurance up 28%; repair and maintenance up 18%; wages up 9% and new truck costs up 12%, while Busters Towing has provided an operating cost increase averaging 17.6% from July 2003. In particular, there has been an unprecedented increase in the cost of fuel since the last towing rate increase approved by Council in 2002. As noted above, Drake Towing has indicated a rise of 40% in fuels costs since mid-2002 and ICBC has instituted a fuel surcharge of 5.5%, effective October 1, 2004, on top of towing distance charges to account for the substantial fuel cost increase.
Staff believe that because of the unprecedented increase in fuel costs over the past couple of years, in this case, an increase above the 6.5% inflation rate is justified. Therefore, it is recommended that the private impoundment and storage rates be increased by approximately 9.6% (when rounded) and the release fee be increased by approximately 8.6% (when rounded). The increase in the release fee is less as the action of dropping and releasing a vehicle from the tow truck is a relatively simple procedure with a lower amount of associated fuel expenses incurred. The proposed rate increases are expected to sufficiently address the towing companies rising operating and capital costs.
The table below presents the City of Vancouver's past impoundment, release fee and storage rates and the new recommended rates for 2005.
Rate |
Recommended 2005 rate |
Current rate (since 2002) |
Rate in 1998 |
Rate in 1993 |
Rate in 1991 |
Impoundment |
$68.50 |
$62.50 |
$56.00 |
$52.00 |
$50.00 |
Release Fee |
$33.65 |
$31.00 |
$28.00 |
$26.00 |
$25.00 |
First 24hr storage |
$17.50 |
$16.00 |
$15.00 |
$13.40 |
$12.00 |
Add. 24hr storage fee |
$13.00 |
$12.00 |
$11.00 |
$10.00 |
$9.00 |
Note: GST not included in above fees.
The new proposed rates for 2005 would result in a total cost of $91.02 (including GST) for tow and 24 hour or less impound period.
Towing Rate Comparisons
Neighbouring municipalities, including Burnaby, Richmond and Surrey have by-laws which regulate private towing impoundment rates. The following table provides a breakdown of the recommended rates for Vancouver and summarizes the current rates in these neighbouring municipalities. As illustrated, the rate structure in Vancouver and Burnaby is flat, irrespective of vehicle weight. However, both Richmond and Surrey's private towing impoundment rates are tied to the ICBC prescribed rates which depend upon the gross vehicle weight.
Municipality |
Impoundment Rate |
Release Fee |
Storage (First 24 hrs) |
Storage (Next 24 hrs) |
Vancouver
|
$68.50 |
$33.65 |
$17.50 |
$13.00 |
Burnaby |
$60.00 |
$30.00 |
$10.00 |
$10.00 |
Richmond & Surrey* From MVA (6 km):
From MVA (7km):
|
$65.48 $67.94 |
No drop charge in Richmond;
|
$8.91 |
$8.91 |
*Note: The ICBC rates shown include a fuel surcharge of 5.5% and are provided only for a tow of 6 km and 7 km or less, respectively. ICBC rates provide for an additional charge per mileage of the tow.
