Thread: ESCONDIDO: Internal audit finds city towing fees were justified

ESCONDIDO: Internal audit finds city towing fees were justified

By EDWARD SIFUENTES esifuentes@nctimes.com
Posted: Friday, March 30, 2012 7:00 pm

Escondido did not profit from towing company contracts and impound fees charged to drivers whose vehicles were seized by police, according to an internal audit released Friday by City Manager Clay Phillips.

The audit was conducted in response to a report released earlier this month by the American Civil Liberties Union of San Diego and Imperial Counties that raised questions about the city's towing program.

Immigrant rights advocates say they believe the city is generating most of the towing revenue from illegal-immigrant drivers, who are ineligible for driver's licenses in California and whose vehicles are impounded for driving without a license during the city's police checkpoints, which are conducted about twice a month.

City officials say the checkpoints are aimed at unlicensed drivers and making roads safer.

In its report, the ACLU asked for an independent audit, saying the city may be illegally profiting from checkpoints funded through federal grants.

Phillips said in a statement released Friday that the audit conducted by the city's finance department shows its fees were reasonable.

"The report supports the belief that the police department was correct in the way they have been assessing the towing fees," Phillips said. "However, it does reveal that the fees should be reviewed on an annual basis, and we will do so."

Kevin Keenan, executive director of the ACLU in San Diego, said the city's report did not answer many of the questions posed by the group's report, including whether the city's labor cost estimates were accurate.

The city's report also did not factor in the more than $250,000 a year the city receives in grants to conduct checkpoints, where many of the impounded vehicles were seized.

"It's a day late and hundreds of thousands of dollars short," Keenan said.

Keenan added that the ACLU was calling on the state to conduct an audit of the city's checkpoint program.

The city's audit analyzed two fee categories: the money that the city charges drivers and the amount it charges towing companies for its contracts.

Officials concluded that the $180 fee the city charges drivers is less than the estimated $185.05 the city spends, on average, impounding each vehicle. Officials also reported that the money that towing companies pay the city is roughly equal to the amount the city spends towing vehicles.

For example, in fiscal year 2010-11, the city's cost to impound 3,392 vehicles was $706,305, including administrative costs, according to the report. The city received $365,612 from drivers and $400,000 from the towing companies (which in turn bill car owners for towing and storage). That means the city had $51,307 left after subtracting the fees from the costs.

The $51,307 was offset by the city's net loss of $58,315 in fiscal year 2009-10, according to the report.

However, the city did not factor into its calculations the taxpayer-funded grants the city receives each year to conduct sobriety and driver's license checkpoints, which in previous years have resulted in dozens of vehicles being seized during each checkpoint.

The city receives more than $250,000 a year in federal grants parceled out by the state Office of Traffic Safety to help pay for the checkpoints.

City officials said the grants had nothing to do with towing fees, which was why they weren't included in the analysis.

"OTS (Office of Traffic Safety) funding pays for officers' overtime and some specialized equipment, like a trailer for the traffic cones," said Joyce Masterson, a spokeswoman for the city. "Other than that, the OTS funding has no connection with the tows; it pays for the time of all the officers at a checkpoint and is unrelated to tows."

After looking at the city's report, Keenan said Escondido should hire an independent, outside auditor to conduct a full analysis of the city's checkpoint and towing programs.

The ACLU's study reported that the city's estimates of the costs of towing vehicles skyrocketed from 2004 to 2011. For example, the city calculated that the time it took to tow a vehicle was 33 minutes in 2004. In 2011, those times increased to 187 minutes, according to the ACLU report.

Masterson said the 33-minute figure cited by the ACLU was not accurate.

"As far back as 2002, the police department was using the 187-minute number," she said.

Phillips said the analysis conducted by the city assumed that the 187-minute estimate was accurate and did not conduct a study to verify that it was correct. He said he had no plans to hire an outside auditor to conduct a review.

It is up to the City Council to decide whether it wants to approve funding to hire an outside auditor, Phillips said.

Call staff writer Edward Sifuentes at 760-740-3511.

ESCONDIDO: Internal audit finds city towing fees were justified

RELATED

http://www.alipac.us/f12/escondido-c...grants-252764/