ADMINISTRATIVE REPORT

Date: December 14, 1998
Author/Local: S. Sayer/7149
RTS No. 00368
CC File No. 2801

TO:	City Services and Budgets Committee
FROM:	Director of Permits and Licenses in consultation with the Director of Finance
SUBJECT:	Amendment to Vehicle for Hire By-law No. 6066 Private Impoundment Towing Rate and Drop Charge

RECOMMENDATION

A. That the private impoundment rates be increased to $56.00 and the drop charge to $28.00, subject to the towing companies agreeing, in writing, to storage charges of $15.00 for the first 24 hours and $11.00 for each additional 24-hour period.

B. That, subject to the above agreement, the Director of Legal Services prepare the necessary by-law amendments.

GENERAL MANAGER COMMENTS

The General Manager of Community Services and General Manager of Corporate Services RECOMMEND approval of A and B.

COUNCIL POLICY

The Vehicle for Hire By-law prescribes the regulation and the administration of the various classes of vehicles for hire.

PURPOSE

This report reviews the private towing impoundment rate and drop charge and recommends a rate increase that is in line with the City's rate of inflation.

BACKGROUND

The City regulates private impoundment and drop charges under "Vehicle 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). Since the City has no power under the Vancouver Charter to regulate storage fees, impoundment and drop charges are approved subject to the towing companies agreeing, in writing, to certain storage charges.

The last impoundment rate and drop charge increase approved by Council was in June 1993.

DISCUSSION

Buster's Towing, Drake Towing and Unitow have requested increases in the rates for private impoundment, drop (or release) charge and storage fees. At present, these three companies are the only ones licenced to provide these services in the City.

While the requested increases ranged from 6.1% (made in 1995) to 39% over existing rates, the companies cited rising operating costs such as fleet maintenance costs, equipment upgrades and increasing personnel costs as the main reasons for the requested increase. Copies of the letters are provided as Appendix 1.

The last two impoundment rate and drop charge increases approved by Council were in September 1991 and June 1993. Approval of the rate increases was conditional upon the towing companies agreeing, in writing, to the recommended storage charges. The Vancouver Consumer Price Index was used as a general measure for changes in the rate structure. The average rate increase in 1991, excluding drop charges, was 14.5% while the City experienced inflation of approximately 15.8%. Similarly, the 6.2% rate increase in 1993 was in line with inflation, estimated to be 5.5% between 1991 and 1993. The following table provides a breakdown of the rate structure since 1988 and presents staff's recommended rate increase.

	1988	1991	1993 -(Current)	Recommended
Impoundment	$45.00	$50.00	$52.00	$56.00
Drop Charge	22.50	25.00	26.00	28.00
Storage Fee	10.00	12.00	13.40	15.00
Additional 24 hr fee	7.00	9.00	10.00	11.00
Average increase*		14.5%	6.2%	8.8%

*excluding Drop/Release charges

Between 1993 and late 1998, the City's inflation rate was approximately 6.4%. While the recommended rate increase is somewhat greater than inflation, it is significantly less than two of the requested increases. All three towing companies were informed of staff's recommendation and two of the companies indicated that they would provide additional cost data in support of a greater increase; however, no information was received at the time of writing this report.

IMPOUNDMENT 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 current and recommended rates for the City and summarizes the current rates in these neighbouring communities. As illustrated, the rate structure in Vancouver and Burnaby is flat, irrespective of vehicle weight. However, both Richmond's and Surrey's private towing impoundment rates depend upon the gross vehicle weight where 5,000 kg is the cut-off between the lower and higher rates. While the proposed impoundment rate for Vancouver is higher than other municipal rates for vehicles less than 5,000 kg, the proposed rate compares favourably against the higher rates charged in Richmond and Surrey for vehicles greater than 5,000 kg. Storage charges are higher in Vancouver than in the neighbouring communities, however, this may be justifiable due to greater property related costs within the City.

		Impound	Drop	Storage (1st 24 hrs)	(Next 24 hrs)
Vancouver (Recommended)		$56.00	$28.00	$15.00	$11.00
Vancouver (Current)		52.00	26.00	13.40	10.00
Burnaby		55.00	27.00	8.00	8.00
Richmond:
	less than 5,000 kg	50.00	25.00	7.00	7.00
	greater than 5,000 kg	100.00	30.00	10.00	10.00
Surrey:
	less than 5,000 kg	50.00	30.00	6.50	6.50
	greater than 5,000 kg	100.00	30.00	10.00	10.00

CONCLUSION

The last private towing impoundment, drop charge and storage fee increase was approved in June 1993. This report recommends a rate increase that is in line with inflation. The recommended increase is consistent with past increases and the resulting rates appear to be comparable with neighbouring municipal rates. Further, it is suggested that private towing impoundment rates be reviewed on an annual basis.

ATTACHMENTS THAT DO NOT HAVE ELECTRONIC COPY ARE AVAILABLE ON FILE IN THE CITY CLERK'S OFFICE

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(c) 1998 City of Vancouver