COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LICENSES AND INSPECTIONS - - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, October 12, 2004 2:05 p.m. - - - - BILL 040595 - An Ordinance amending Title 9 of The Philadelphia Code ("Regulation of Businesses, Trades and Professions") by amending Section 9-605 ("Towing") to prohibit certain towing upon the establishment of a rotational towing system; to define the parameters of the rotational system; and to make certain technical changes; all under certain terms and conditions. PRESENT: COUNCILMAN RICHARD MARIANO, Chair COUNCIL PRESIDENT ANNA VERNA COUNCILMAN FRANK RIZZO COUNCILMAN JACK KELLY COUNCILMAN JUAN RAMOS COUNCILMAN DARRELL CLARKE COUNCILWOMAN BLONDELL REYNOLDS BROWN - - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X BILL 040595 FRANCIS HEALY, Police Dept.......... THOMAS NESTELL, Police Dept.......... 8 RICHARD FEDER, Law Dept.............. 12 LINDA SOLTYSIAK...................... 27 JENNIFER SOLTYSIAK................... 30 DOMINIC RAGGUCI...................... 45 ARTHUR KULIS......................... 48 RALPH SPOSATO........................ 59 CHARLES NYGRD........................ 60 JOHN DOUBMAN, Insurance Federation... 65 ART LENKE, AAA Mid-Atlantic.......... 73 BYRON SOLVENSON, Enterprise.......... 78 JOHN MATTIONI........................ 83 ANTHONY DICASTLENUOVA................ 100 JOSEPH DICASTLENUOVA................. 144 JOSEPH DITILLO...................... 150 ED ALFANO............................ 152 ANTHONY BOYLE........................ 158 JOSEPH TRENT......................... 162 RICHARD ANTONOCCI.................... 164 JOSEPH PARENTE....................... 165 GUIDO DICICCO........................ 166 JOSE LATORE.......................... 173 DAVID WIECKOWSKI..................... 179 ALBERO PENA.......................... 184 ARNOLD WHITE......................... 185 3 10/12/04 - L&I - BILL 040595
The public meeting of the Committee on Licenses and Inspections is now open. I have to my left Councilman Rizzo, Councilman Clarke Councilwoman Blondell Reynolds Brown, myself Councilman Mariano, and Councilwoman Verna is also present, so we have a quorum. Will the Clerk read the title of Bill No. 040595?
Bill 040595, an Ordinance amending Title 9 of The Philadelphia Code ("Regulation of Businesses, Trades and Professions") by amending Section 9-605 ("Towing") to prohibit certain towing upon the establishment of a rotational towing system; to define the parameters of the rotational system; and to make certain technical changes; all under certain terms and conditions.
Thank you. The first panel we're going to have is Francis Healy, Staff Inspector Thomas Nestell, and Richie Feder from the Law Department.
Good afternoon, Councilman Mariano and Members of the 4 10/12/04 - L&I - BILL 040595 Committee on Licenses and Inspections. My name is Francis Healy, I'm to represent Commissioner Johnson of the Police Department and I'm here along with newly promoted Staff Inspector Thomas Nestell. First, Commissioner Johnson would like to extend his gratitude for allowing the Police Department to express its opinion on this significant legislation. These amendments will dramatically impact upon the safety of motorist and pedestrians as well as the manner in which towing services are made available to disabled motorists throughout the City of Philadelphia. As you well know, the primary objective of the Philadelphia Police Department is to protect life and property. However, for many years dangerous conditions have existed on our roadways that the Police Department has been powerless to completely control or eliminate. This hazardous practice is better known as wreck-chasing. Quite simply, the tow truck or towing company on the scene of an accident or a disabled vehicle 5 10/12/04 - L&I - BILL 040595 usually got the job. Not unexpectedly, this leads to multiple towers racing to be first in time to many accident sites. While the Police Department currently does cite towers who drive carelessly and recklessly, the profit motive far outweighs the risk. Herein lies the dangers to motorist and the pedestrians alike. When livelihoods depends upon the first to reach an accident, caution and often common sense seem to disappear, disregarding lights, stop signs, illegal turns, jumping medians and speeding have regrettably become the norm rather than the exceptions for many of the tow operators in Philadelphia. As the law of unintended consequences would have it, the current towing laws had actually created and facilitated this very hazard I've identified. For there is no 21 logical or systematic method to assign accidents to specific towers. Hence, the towers are left to fend for themselves and literally scramble for any and all available work. 6 10/12/04 - L&I - BILL 040595 One would argue that this is the very essence of out capitalistic economic and the government should refrain from any further interference. The Police Department would wholehearted agree in theory, except for the fact that the current system is placing towers and the unsuspecting public in imminent and very real danger each and every day. Thus, it is our firm belief that in the scenario it is the government's duty to intervene to protect its citizens. The amendments to 9-605 creating a rotational towing system does just that. Simply stated, only those towers assigned to an accident or disabled vehicle would be legally able to accept the job. Regardless of who else may show up, only one tower can get the job. No need to race or run lights. The profit motive behind such hazardous behavior will be eliminated, hence, the danger will no 22 longer an exist. New York City has also recognized the dangers inherent in the first-come-first-served towing system and has 7 10/12/04 - L&I - BILL 040595 already experienced many of the problems that Philadelphia is now encountering. They too experience a wreck-chasing problem. However, they have implemented a rotational tow system similar to the amendments proposed here today and they have effectively eliminated their risks. For this reason alone, the Police Department fully support the amendments to Section 9-605 creating the rotational tow system here in Philadelphia. On a side note, while the Department's objectives are firmly grounded in safety, we also recognize and support the consumer protections afforded in this legislation as well. As you know, there has been many horror stories of price gouging or unethical business practices among certain towers. Under the current statute, it may very well be illegal for the City to regulate pricing in voluntary transactions between the motorists and the towers.
However, under the new system, the tows provided will be mandatory in nature, and accordingly, the government would be capable to regulate both 8 10/12/04 - L&I - BILL 040595 towing and storage fees. While this is not our primary reason to support this legislation, the Police Department believes that these building consumer protection provisions would better serve those people who suddenly find themselves in a distressed and stranded situation. This will conclude our testimony. And once again, I thank you on behalf of the Police Commissioner for allowing us the opportunity to express this opinion. Myself and Staff Inspector Nestell will be available for any questions.
When Captain Nestell was the commanding officer of Highway Patrol, he had a personal encounter that I'd like him to -- would you pull that microphone. He was in a police vehicle, and go from there Staff Inspector Nestell.
Thank you, Councilman. I can tell you there are numerous stories. I know that the story you're referring to. I 9 10/12/04 - L&I - BILL 040595 was responding to an auto accident on the Schuylkill Expressway. Prior to approaching that accident scene, I observed a tow truck driving the wrong way on the expressway to get to that accident scene first. I think that Sergeant Healy talks about the public safety issue and the business of wreck-chasing. The first person that gets to that scene of the accident historically ends up receiving the contract for the repairs and the removal. The incentive for the tow truck driver is so astronomical that they're willing to take -- some people are willing to take chances in getting to that scene first. I can tell you that I have personally issued citations to tow truck drivers that I've seen disregard red lights, that I have seen driving in excess of 80 miles an hour, that I have seen driving on the shoulder of the highway when traffic is stopped because of an accident ahead. And this is an issue that is a recipe for disaster.
Thank you. 10 10/12/04 - L&I - BILL 040595 Inspector, did you give that guy a ticket?
Is that man here day without pointing to that person?
No. As a matter of fact, I looked through the crowd. I am familiar with some of the less reputable drivers, and I did not see any of them in the hall.
A lot guys here could probably be out making money and are sitting in here watching this. We're not trying to do anything to hurt blue collar people like this who are trying to feed their families. This isn't on you.
And I would argue that they're the ones being hurt by the system that exist because the tow truck drivers that are willing to break the law are the ones that are going to get here first and get the job. So these gentlemen are not getting a fair shot at the business in Philadelphia and we're unable to control this. 11 10/12/04 - L&I - BILL 040595
The vibe I'm getting -- let's get right to the crux of it. It's going to go to Richie Feder next. These guys are trying to make a living. They're not selling drugs, they're not on welfare, they're not stealing cars. Maybe some of them have done some of that stuff; I hope not, but it's quite possible they reformed themselves and they're here. I'm just looking around the crowd now and I don't know any of them that might have done that. One possibility, but I won't look at him. No, I'm just teasing. You know what I'm saying? At the risk of sounding like George Bush, are we going to over-regulate these people so they can't make a living? The last thing I want to sound like is a conservative Republican and I'm really a liberal Democrat. But I do not want these guys and ladies -- there's a couple ladies in the crowd. This is how they feed their family. I didn't look at this close enough yet. I met with their attorney. He asked me 12 10/12/04 - L&I - BILL 040595 to look at it. My legislative guy knows more about it than me. And I know you're a good guy. You have a great reputation as a policeman, same there, and a lawyer here. But has there been any input from this group or their parent organization? Are we just thrusting something at these guys? Does anybody know that? Mr. Feder, could you answer that? Did we meet with any of guys?
I wasn't involved in putting together the legislation, Councilman.
Councilman, did we meet with any of these towers or wreck-chasers?
The purpose of this hearing today is to meet and discuss the issue.
Mr. Chairman, Members of the Committee, my name is Richie Feder. I'm the Chief Deputy Solicitor for Appeals and Legislation in the Law Department. Councilman 13 10/12/04 - L&I - BILL 040595 Rizzo asked me to come and just give a brief overview of the technical ordinance and then respond to one legal issue that's looking --
Rich, to clarify this for everybody, this is an administrative bill that the Councilman introduced and I co-signed with him? Or was this written for somebody?
This is sponsored by the Police Department, L&I and the Mayor.
Did the Mayor call somebody one day and said, "Let's do this," because he forgot to call me on it.
I don't know the specific origins, but I know the Mayor sent this over as an Administration ordinance.
Sergeant, do you send it to Richie? Richie is the technical guy and he has to --
I believe it is the 14 10/12/04 - L&I - BILL 040595 result of current lawsuits that are pending against the Police Department this legislation was drafted.
This pains me to do this kind of stuff. There's no sense of even coming here. We're going to have this hearing, but I got to know, who is the genius that thought of this? I mean, was it Tom Ferrick from the Inquirer? Because I know he's here and it's an issue that has been -- and I'm not saying it's right or wrong. Maybe it's good that we hear this all out because I think that's what Councilman Rizzo thinks. But does anybody at this front table here know who -- when the light bulb went off, who was responsible for this? Was there somebody? I'd like to know.
I don't think any of us knows who's responsible. I suspect the answer is there isn't one person. I think it's, as Sergeant Healy testified, this is a practice that already existed in New York City and it's a proven method of both responding to the wreck chasing that Sergeant Healy and Staff 15 10/12/04 - L&I - BILL 040595 Inspector Nestell testified to and responding to the legal concerns that are raised in a separate lawsuit.
So if this gets favorably recommended out of Committee today and it goes to the Council and becomes a law, even without all these people's -- without their input, they're going to obviously do something. Maybe we can save the City a lot of money for legal expenses. I did a bill I'm thinking of that said you couldn't hang signs on poles, and I thought it was harmless. I was just tired of looking at weight loss bills because it makes me remember how fat I'm getting. That was part of it. But we passed that. The Law Department writes it for me. Another Councilman doesn't like. He challenges it. It goes in, people sign on, and all of a sudden it's not a bill. Then that just goes away. But nobody in the Law Department -- that was my idea to do that. It wasn't you, Rich. Somebody wrote that and I thought that the Law Department writes a bill, geez, that's 16 10/12/04 - L&I - BILL 040595 the gospel to me. God didn't want me to go to law school so that's why you did.
I'm familiar with that bill, Council. I continue to think the bill 6 is lawful, and we're working on amendments to help respond to the concerns of the day.
In your legal opinion -- I'm not putting you on the spot, but you're the big guy here that they sent here, so your boss definitely likes you. This will pass Constitutional mustard?
I'm not familiar with any others. But the United States Court of Appeals for the 2nd Circuit in New York approved an ordinance that was very similar to this upon the grounds that -- 17 10/12/04 - L&I - BILL 040595
Mr. Feder, Counselor, could you please explain this ordinance?
Certainly, Councilman. In a nutshell -- and Sergeant Healy has already pretty much covered the details. But what this bill does, it authorizes the Police Department to establish what's called a rotational system. And what that rotational system would be is that the Police Department would invite eligible towers who meet certain criteria to be on a list. And then the tower that's at the top of a list would get called if in the event of an accident or a disabled vehicle was blocking the highway or is on the shoulder of the Schuylkill where you can't have a vehicle sitting for safety reasons. What this bill does is it explicitly prohibits any other tower from responding to that call or from towing that car other than the tower who is at the top of the list. Once that 18 10/12/04 - L&I - BILL 040595 tower is called, he moves to the bottom of the list. The next accident comes, the next guy on the list gets called, thus the rotational system.
And that would be just the Schuylkill Expressway and 95? What if it happens like on Summerdale Avenue?
Anywhere in the City where a car is blocking the highway or blocking the street, impeding traffic. If a car is parked, it wouldn't cover that if it's not blocking traffic. But if it's on the shoulder of the expressway or in the middle of Summerdale Avenue --
So if Councilwoman Reynolds and I decide to go into this business tomorrow because it's much more profitable than what we do -- because it will probably work out real good; she's a minority, she can run the company, I'll work for her, I'll drive the tow truck, she'll write all the checks. Now, we don't know nothing about towing except for maybe when I drove a tow truck for about two months when I got out of 19 10/12/04 - L&I - BILL 040595 high school and smashed up about three cars probably. But if we do that and we don't know anything about towing but get on the list and we get on this thing and we can get in the rotation like some of the guys that's been around here doing this? Because I think there's a fear here. And we're going to find it out when they speak. I want this to see the light of day, but I just want to make sure they're being included, because I got a feeling they're not.
With respect to you, Councilman and Councilwoman Reynolds Brown, I have a feeling that the tow truck company you just described would not meet the eligibility standards that the Police Department will be setting up. There will be standards.
The standards that they have to do anyhow, these guys, right? Would it be a run all of a sudden on who wants to do this now if this happens? Will we get a thousand more guys from out of 20 10/12/04 - L&I - BILL 040595 town that are going to come in here and start doing this? And then I won't know any of these guys' faces. It will be like a big conglomerate someday, one big tow company or five big tow companies that fix the bids between the five of them? Will that happen?
I don't believe so. We have a system in place now that's been working very effectively very similar to this, and we use it for the stolen auto program.
Is that the same with the trucks with Judge Perry and Eddie Alfano? Is that what we're talking about?
And numerous other towers on the wheel. That's how we envision it to be working. And it does work effectively in that some of the requirements for the towers would be they have time limitation, be able to get to a certain area, 21 10/12/04 - L&I - BILL 040595 a whole bunch of City requirements, insurance requirements such that would require them to meet before they would be eligible on this wheel.
What measures or assurances are in place to ensure equity across the board for participating tow trucks?
I believe, much like stolen auto program, the City is divvied up in geographic locations. If there's 300 towers, you're not going to be -- the next call will not be 300 tows away. I don't believe that's how it's going to be operated efficiently. I mean, it's going to have to be broken down geographically so responding towers can get there within a reasonable period of time. I think carving the City up in certain locales does make it much more equitable. So those towers in those areas would have more opportunity.
Sergeant, isn't 22 10/12/04 - L&I - BILL 040595 everyone going to want the one where the expressway is? If I was going to pick one of these, it would be where the expressway goes into Ridge Avenue up there, you know where the accidents are anyway. Or we can go anywhere on 95 and watch everybody with Jersey tags do 150 miles an hour anyway while I'm doing 60 and people are passing me. Who gets those?
Could you answer my question first, though? Who gets the price locations? Will there be a lottery?
I don't think locations, per se, will be given out, but it will just be rotational. If you're in that geographic area and I believe you put yourself into that geographic area, you'll be on the wheel for whatever pops up at that location.
Will there be areas that nobody will want to do because historically there's not a lot of accidents somewhere, maybe down Richmond Street because there's no accidents? 23 10/12/04 - L&I - BILL 040595
Not necessarily accidents, but this also covers disabled vehicles that are blocking the highway and stuff like that so... The Police Department perspective on this is not in any way to limit or inhibit business. What we're trying to do is just, like I had mentioned in my testimony is, we believe in free trade and everything should go without government interference in a perfect society.
In this situation, we obviously see the risk to not only the towers themselves, but the unsuspecting public. That's the only reason why we're asking the government to intervene in this area. And we're trying to do it the best way possible through the rotation to guarantee that equity-based system.
I just wanted to make sure, as the hearing progresses -- this 24 10/12/04 - L&I - BILL 040595 room is full of people. In fairness, there are people in this room that are opposed to rotational towing, and there are people here that are in favor of it. So you're going to hear from both sides. I don't want you to suggest that everybody in this room is opposed to rotational towing.
No, I don't think that. But nobody that's in favor of this called me or talked to me or stopped in my office. It's always the people that are against. I've got to think there's something important if people like this come down here at 2:25 in the afternoon and sit here for 40 minutes until four or five of us decide to show up. It's pretty embarrassing actually. I'm sorry, you've got another question, Councilman?
If I could just complete the overview. Once the City has established the system and prohibited anybody other than the designated tower next on the list from 25 10/12/04 - L&I - BILL 040595 completing that particular tow, the City is then authorized to establish a fee schedule which Sergeant Healy talked about would be an incidental benefit of this in order to eliminate some of the price gouging stories that sometimes we hear about. Finally, I want to touch on the preemption issue that you're going to hear about. There is surprisingly federal law on the question. And the United States Congress has preempted local governments from regulating the pricing of consensual tows, tows that you and a tower voluntarily enter into. The federal government, however, has explicitly allowed local governments to regulate in the area of safety and also with respect to the pricing of non-consensual tows. And as you heard from Sergeant Healy, the primary purpose of this ordinance is to prevent wreck-chasing stories that Staff Inspector Nestell talked about. And so City Council clearly, in my view, has the power to create a rotational system in order to protect the safety of motorists on the highway, on 10/12/04 - L&I - BILL 040595 City streets. And then because the tow then becomes non-consensual, you as the owner of a disabled vehicle, you have no choice but to accept a tow from this particular tower. We, therefore, have the right to set pricing. And the logic of that obviously is to avoid the unbelievable price gouging that would occur if you only could take it from one tower. And so Congress has again given us the right to do that. And that's exactly what the federal court in New York ruled on. Although you're going to hear some arguments later that we are preempted, it's the Law Department's judgement that we're not and we are prepared to defend this ordinance and believe it would be upheld in federal court.
Let me ask you a legal question as a City attorney. When we have hearings here and there's an appeal to an ordinance and they use this transcript here, as an attorney, like a zoning case, are you presenting your case here so everything has to be in line like a zoning hearing when appealed after that? 27 10/12/04 - L&I - BILL 040595
I don't think there's any requirement for us to do this in terms of the law. I think it's more to satisfy the Councilmembers because you're going to hear differing legal points of view, and you need to understand that there is a very strong legal basis of this ordinance. That's the purpose of it.
Thank you. Next panel, citizens victims panel. Jennifer Soltysiak, Linda, and Bill Hodges (sic). You want the ladies to go first?
Thank you. And, Ladies, say your name. I know I slaughtered it. Say your name for the record, whoever wants to go first.
Linda Soltysiak. 28 10/12/04 - L&I - BILL 040595 On the evening of November 5, 2003, I received a call from my daughter Jennifer stating that she had been in a car accident and would need a ride home. When I arrived at the accident, there were already two tow trucks there. One of the tow truck drivers was talking with my daughter and wanted to tow her car. I told him that we were members of AAA and that we would have to give them a call first. The driver said that he was a member of AAA and could start hooking up the car. He was very nice, and it would have been easy to believe him. I told him to wait and Jen would make the phone call. At this point, Jen was involved talking to the police and thought it would be easier if I made the call for the tow truck. I was talking to AAA and mentioned to the dispatcher the tow truck driver. The dispatcher told me not to get involved. They would put the call through and if he was a member of AAA, he would receive the call within a few minutes. When I hung up with the 29 10/12/04 - L&I - BILL 040595 dispatcher, got out of my car, the tow truck driver was gone. AAA towed Jennifer's car to our house. I suggested to the driver that he drop the car off on Magee Street on the corner. This would make it easier for him to unhook the car and also for the next driver on the following day to make the pickup. The car was legally parked and parked diagonally across the street visible from our front door. The next day sometime in the morning, a different tow truck driver knocked on my door of our house and asked to speak to Jennifer. I told him that she was on the phone could I help him. Jen was on the phone, but sitting on the couch near the front door and heard the conversation. The driver said he noticed that she had an accident and knew that she wasn't covered for collision on her insurance and wanted to tow her truck and have it fixed. My first thought was how this person knew my daughter's name and address and that she didn't have insurance to get her car fixed. This gave me a very uneasy feeling. I 30 10/12/04 - L&I - BILL 040595 asked him where he got his information. He told me he got it from the police report. I told him that Jennifer was looking to getting the car fixed. He offered to give an estimate for repairs. While he was doing this, Jen and I both agreed it was pretty creepy and pretty upsetting, first that he knew where she lived, insurance information, and he was going to give an estimate without looking at the engine and putting the car on the lift. The driver returned with a rough estimate and said that it might cost more if he wasn't able to tell if there was motor damage. I asked him to write down his quote on something with his name and phone number on it. He wrote the information down on his business card. I took the card, thanked him and said Jennifer needed time to think about what she was going to do. Thank you.
I was 31 10/12/04 - L&I - BILL 040595 involved in a somewhat minor car accident on the evening of November 5, 2003, at the intersection Aramingo Ave. and Tacony Street. Shortly after pulling off to the side of the road with the driver of the other vehicle, tow trucks began to stop and drivers began to try to gain my business. They were very nice to me. One gentleman even held an umbrella over me to shield me from the rain. In attempts to persuade me to use their service, one driver claimed he was AAA. However, when my mom called AAA for me, he was not the dispatched truck and left the scene after the call was placed. Even though there were a few different tow trucks at the scene trying to promote their company, they were, for the most part, respectful of my decision to have AAA come and tow my car to my house until I figured out what I was going to do with it. I was given a few business cards, and that was the end of it. The real concern I have is tow truck drivers using questionable practices to gain 32 10/12/04 - L&I - BILL 040595 customers was an incident that happened the next day. The morning of November 6th, I noticed a tow truck parked behind my car which was parked diagonally from the corner of my block and not directly in front of my home on 6554 Cottage Street. I didn't think anything of it until later on that day I saw the same tow truck parked out in front of my home and the driver coming up to knock at my door. My mom answered the door and I was sitting near enough to the door to hear everything that was said. The driver asked for me by first and last name and was trying to gain me as a customer to his shop by giving me a quote for repairs on my car. He stated that he knew the limits of my insurance coverage, and when asked, claimed that he got information from the police report of the accident the night before. He offered to tow my car right then to his shop. And after we said "no thank you," he handed my mom his quote on the back of his business card. After he left my front step, I 33 10/12/04 - L&I - BILL 040595 called the 15th Police District which is where the accident took place to ask them about their practices regarding giving out information collected at an accident scene. The officer on the phone assured me that they do not give out information to tow truck companies and I could fill out a statement if I wished by calling 911 or by stopping by the station. I did not feel that this warranted an emergency phone call, but I had no way to get down to the station to fill out the report in person. Sometime in January I was pulled over on I Street right by where I work and was surprised when the officer asked me if I knew why my car was listed as abandoned. I jokingly said it couldn't be abandoned if I was driving it, but the officer was serious. He asked if I had left my car parked for a length of time back in November with damage from an accident. m. m. the following day. It was then I realized that the tow truck driver that knocked on my door had ran my tags by listing my car abandoned and then used information to dupe me into thinking his shop was somehow specially tied with the Police Department and offering me the convenience of towing it right then. I tried to contact the Abandoned Car Division of the Police Department about getting my car off the list but have not yet been able reach anyone who can tell me that it has been removed. It wasn't that the tow trucks that showed up at the accident scene that bothered me. They saw an opportunity to gain a customer and politely gave me their card if I decided to use their shop. The most disturbing part was that some random tow truck driver was able to get my personal information about me from my tags and came to knock at my door. If he had been a rapist or a murderer, he would have had access to all the same 35 10/12/04 - L&I - BILL 040595 information just because he drove a tow truck.
Thank you. I just want to say Councilman Ramos has joined us a couple minutes ago; I just forgot to tell you. Sir.
My name is William Lodge. I was involved in a motor vehicle accident on March 12th, Friday night, at 9 p.m. this year. It was located at the intersection of North 16th Street in the Broad Street off ramp of the Roosevelt Expressway. I was not as lucky as the two ladies who are sitting next to me. I was injured in the course of the accident and stuck in the car. I was approached by a tow truck driver who I happened to know. He used to be a Philadelphia Police Officer and he was discharged from his employment so he obviously needed something to do for a living so I guess he decided on being a tow truck driver. He approached my vehicle. I didn't quite recognize him at first. He says, "Oh -- he 36 10/12/04 - L&I - BILL 040595 mentioned his name. His name was Akeel (ph). He said to me, "I'll take care of you." I was in a lot of pain. I was waiting for the police and the EMS rescue squad to show up. So I pull out my keys and I said, "Could you take my car here? That's the name of an auto body shop, Len's Auto Body up on Cottman Avenue, which I've done business with before and he's extremely reputable. "Oh, no, I can't take it there. I'll take care of you," he said. He hands me a blank piece of paper, he gives me his cell phone number. And you really can't defend yourself or argue when you're getting hustled out of the car by the rescue EMS personnel and getting put on a stretcher and getting taken away. What struck me most was the fact that someone -- when the other tow truck drivers walked over to the EMS and said to me, "Oh, don't use him. He's going to charge you hundreds of dollars to get your car back." He said, "Call AAA." Well, you can't really do anything 37 10/12/04 - L&I - BILL 040595 when you're getting hauled off to the emergency room. I was in Einstein approximately all that night and the majority of Saturday. I contacted him by phone, and he had towed my car over to Rising Sun and Eleanor which looked like a bunch of abandoned garages with numerous tow trucks parked around and it looked like they got last night's haul over there. My car was there and there were several other vehicles that were obviously involved in recent accidents. And he eventually towed my car to a body shop on Aramingo and James Street. I contacted Len's after I got myself together. I had bruised ribs, I had back injuries and a knee injury. And I spoke to Len and I said, "I got to get car up here to you because I don't trust these guys. They seem to be, in my opinion, slightly dishonest in the way they did business." I didn't care too much the way did the business. So I contacted Akeel and his tow truck outfit, Philadelphia's Finest. And I asked him how much would it cost to get my car 38 10/12/04 - L&I - BILL 040595 out of there, I'm going to send a tow truck down from Len's to get my car and how much would it cost. Well, they hemmed and hawed. It took about an hour and a half. The bill 6 came out to $460 which my insurance company was forced to pay. I feel sorry for the people who don't have coverage or an understanding adjuster who knows just the way business is conducted in Philadelphia among some of the more disreputable tow truck drivers. $460 for a tow from basically Broad Street to Aramingo and James. On the bill they had there that he charged a fee for waiting for the scene to be cleared by the Accident Investigation Division of the Police Department. I think that was $80. I think he also stuck in a fee in there for cleaning up the scene of the accident. I felt like I was a victim. I felt like I was ripped off. And I'll be honest with you, I think -- who speaks for the people who are involved in an accident that can't speak or are semiconscious. Or if I would have left my car there, it's a high-crime 39 10/12/04 - L&I - BILL 040595 area, it's two blocks from my home. It would have either got stripped or maybe a renegade tow truck would have picked it up and took it for parts. That's the end of my testimony, sir.
Thank you. Any questions for these witnesses? Councilwoman Brown.
In no way to be presumptuous having heard your testimony, what is your recommendation on this bill?
I'm not sure about how to handle who gets to the scene. But how they try to convince people they're going to take care of them, like the guy that came to my house tried to make me think that he was with the Police Department and like knocked on my door asking with my name. My car wasn't parked in front of my house, so he wouldn't have known that was my car. He shouldn't be able to do that. The guys who came to the scene when I was in the accident, like I had gotten in an accident actually across the street from a shop. They 40 10/12/04 - L&I - BILL 040595 weren't one of the tow trucks that came, but they were nice guys that came. They were just trying to get business, which I can understand. They were, for the most part, polite. But the way they get information. And then now when I get pulled over, I get told my car is abandoned, and that is a problem. That's hard to fix.
I feel the same way. The rotation seems like it would cut down on accidents. Getting to and from the scene is important. But for a driver to get this kind of information, it's a violation of privacy. I feel violated.
When I called to ask if they give the information from the police report out, they said I could call 911 to fill out a report or come down to the station, but my car wasn't working and I didn't feel it was that big of an emergency to 41 10/12/04 - L&I - BILL 040595 call 911 for. But I still have his card, actually, that he gave me.
Could you tell me, have you resolved the issue of your vehicle being listed as abandoned? Because if that is still on there, we'd like to address that issue.
Mr. Vogler will speak to you after you testify and will be more than happy to check to make sure that that is taken care of. I hope Staff Inspector Nestell and Sergeant Healy will also make sure that it's appropriately removed from the database.
Yes, ma'am. I personally feel that the police on the scene should be in charge the accident. 42 10/12/04 - L&I - BILL 040595 If there's need for emergency medical service brought in, the officer would call for a medic unit. If there's a need for a tow truck, the officer should be able to contact police radio and have a tow truck dispatched to the scene or contacted to the scene. I'm a private citizen, but I'm also an employee of the Police Department. And police radio -- done a great job now. We have -- if a car is stolen and recovered, they call for a tow truck, so it doesn't get stolen from before, off a list. We're doing a great job with Live Stop. They have tow trucks available from the Parking Authority for that matter. The officers from the Neighborhood Services Unit, they have contracted lists of salvers that they contact to come in. There's no rush to the scene to get the abandoned auto. It's done in an orderly fashion from people who appear to be reputable unless there's complaints made. So this would be just taking that, in my opinion, a step further. The officer on the scene contacts the salver of the day or the month or the 43 10/12/04 - L&I - BILL 040595 salver for the division or the district or whatever, however we break it down.
So having the Police Department as a single part of contact, in your view, adds some level of sanity to the process and the circumstances taking place?
I agree with that 100 percent. Because the guy could have made a hundred bucks probably towing my car to this particular auto body place from the accident I was. Instead, I got the hustle.
I just wanted for the record, this business card was presented to you at your home?
For the record, I want to read this, not just the quote, but it says "Cash, total 3,200." 44 10/12/04 - L&I - BILL 040595 I think the Internal Revenue Service would love to see this.
I wound up actually paying 4,000 for it to get fixed at the dealer, so I wind up getting screwed anyway but not by the tow truck driver.
One of the issues that's been pointed out and we'll probably hear more about this, that many of the hustles to fix the vehicle, the repairs are substandard. They use after-market parts instead of the parts that are meant to be on the vehicle. The steel is thinner. They're just not the quality that you expect. And then months later, the vehicle starts to deteriorate as a result of these repairs. But we'll be hearing more about that. I just wanted to, for the record -- not suggesting that the person said cash $3200 wouldn't report that cash, but there's a chance that that may not have occurred. But I think that probably it would have been reported. Next panel, Mr. Chairman.
Next panel, Panel 3, body shop owners and operators. Paul Brothers, Charles Nygrd; AOK Autobody, Art Kulis; Gus's Autobody, Dominic Ragguci; Haines Street Collex, Joseph Stafford; and Dr. Ralph's Automotive Services, Dr. Ralph Sposato.
Mr. Chairman, if there's anyone else we neglected to mention, please raise your hand.
Good afternoon. My name is Dominic Ragguci, and I'm here on behalf of Gus's Autobody at 9412 Bustleton Avenue, Philadelphia, PA 19115.
Gus, don't let me interrupt you, but let me first start out by interrupting. How long you been doing this?
What, the auto body 46 10/12/04 - L&I - BILL 040595 business?
I'm not a tow truck driver and I don't operate a body shop. I'm just a spokesman for the business.
All right. What do you think about this stuff? Is that part of what you're go to go say?
Then I'll let you say it. I was going to ask you, it looks like you've been around a little. Not that you're old, but I was going to say, what's this all about? I mean, this sounds like some real scary stuff, to go to a woman's house and 47 10/12/04 - L&I - BILL 040595 tell her information, which we might all know anyhow but it's scary when you don't realize it.
I'm known to a couple members of the panel. Gus's Autobody is a second generation auto body shop established at its location in Northeast Philadelphia in 1949 by Gus Natelli, Jr. Gus owns and operates a tow truck in conjunction with his body shop. We recognize a rotation list is inevitable if not eminent. There are concerns -- and these will parallel the items that you mentioned earlier, Mr. Councilman. There are concerns about future fair management of a rotation list. There is a potential for body shops and tow truck operators sponsored or funded by major insurance carrier claims departments or major national auto body franchises to develop influence or a control over the rotation list. This potential could exist in any political environment. Such influence or control could compromise and affect smaller but otherwise 48 10/12/04 - L&I - BILL 040595 qualified participants on the rotation list, thus seriously affecting the smaller operator's livelihood. Thank you.
Good afternoon. My name is Arthur Kulis, President of AOK Autobody located at 1330 Washington Avenue. I'm a body shop owner.
Yes. I actually started the business in 1957 and doing all the work myself.
I think that I'm losing a lot of business that I used to have because the chasers are stealing my work. That's what I think.
You've been 49 10/12/04 - L&I - BILL 040595 doing this a while. Using your expertise and your experience in this business, why -- this didn't just happen overnight. We've been reading about this in Mr. Ferrick's column for a while. Do you remember a time when this didn't happen?
Yes. I can remember -- actually, we stopped getting work, I'd say, 10 years ago. Up until that point. We were open until 6 o'clock in the evening. I would sit at my desk between 4:00 and 6:00 and get at least a dozen cars. "Art come tow my car. I'm located at such and such a place." I don't own a tow truck. We'd call somebody go get it. That sort of like died out completely. We were getting phone calls to come tow my car. By the time I would send a tow truck, the car is gone. I would ask the customer, "What happened?" "Oh, the guy said he's going to pay my deductible for me. I didn't pay it and I know you charge." Yeah, I don't give money away. 50 10/12/04 - L&I - BILL 040595 There's no free lunch out there. And other customers would tell me he's going to give me new tires, paint my whole car. But I've seen the cars that were fixed afterwards. And it's a shame. People got ripped off, and they know it. Any customer who comes to my place and I happen to see they had it fixed someplace else because of shoddy work, I'm not very nice to them. But they do still let me fix the car. Every Monday morning I have to come to work with at least a thousand cash in my pocket. Maybe I can get one car out of the shop. Here, I have different bills, the money I paid out to get a car out of the shop. This was $1550 cash; 475 cash.
For someone who asked you to fix their car, you've got to get their car; is what you're saying?
They pay. They used to 51 10/12/04 - L&I - BILL 040595 pay. But now they're not going to pay. If it's more than 2 to 300, I have to call and get permission first. And some of the horror stories the people tell me. And now today, two days on the phone trying to get one car out of a shop. They wouldn't even tell me how much I owe. Then finally they told me, "You owe $650 cash." But I sent a tow truck. When he got there, he said you have to get the owner here to come down, they've got to sign the release. It's always a stall to get another day's storage. It's not the right way to do business.
Incredible. I guess it's because the business we're in and people do stuff for us as far as our City vehicles are taken care of. I have sons with cars, and it's a major pain in the butt getting tows and doing things. It's not because of any of these guys, but I've got to think -- you've been around -- when we started regulating this industry like maybe 10, 11 years ago when L&I started -- I'm trying to 52 10/12/04 - L&I - BILL 040595 remember what L&I Commissioner. I'm looking at Councilman Rizzo because he's been here as long as I have. But I think it was either Levin or Fran Eagan when they started doing this and all the trucks -- we were doing away with gypsy -- they were calling them gypsy tow trucks in them days. It has to be years 9 ago. They put the emblems on the side of the 10 car and that was supposed to solve everything. Is that when this all started happening when people had to start hustling in a different way? There's always going to be that bad element, but is there a tow truck drivers thing against body shop owners? What do you think it is?
My opinion, most of the -- not all tow truck drivers but a lot of tow truck drivers sell the job. They don't even take it. They don't have a body shop. They're just selling it to the highest bidder. Like I said, there's no free lunch out there. The insurance companies do not give money away. We're regulated by the insurance industry on how much we get paid per 53 10/12/04 - L&I - BILL 040595 hour and what parts to put on the car. There's guidelines for every insurance company.
When you just said a minute ago that the body shop said to your potential customer that they would pay for the deductible, I think people realize when a body shop pays for the deductible, something's got to give somewhere; the part that was supposed to be replaced is straightened. They have to make up that money someplace, because I believe it is a violation of the law to fudge an estimate to pick up the deductible.
It is against the law. It's a $15,000 fine, 7 years if you try to cheat or defraud any insurance company. That's a new law a few years ago that came out. People are still doing it. Eventually, the other shoe is going to fall.
If a person has a $500 deductible and the body shop says, "Don't worry about it. You're not going to have to pay the deductible," people listening have to 54 10/12/04 - L&I - BILL 040595 realize that to make up that $500 something has to give here, whether the insurance is paying for a new fender and it turns out that it's being straightened or they're paying for a new bumper and it's -- well, we don't have too many chrome bumpers anymore -- that it's a refinished bumper. Obviously, there's something being pulled out of that job to make enough money to pay so that the customer does not have to pay the deductible. Again, it's illegal. And what I described a little while ago, the vehicle is potentially not being repaired as well as it would normally be if the body shop wasn't trying to make up the deductible.
Correct. But also when an individual makes a private contract with the body shop to save that 500 or not pay the 500, if the repairs are not satisfactory to the individual's car, when he goes back to his insurance company, there's no recourse. But if they paid the deductible, the insurance company will go back to that shop and make them fix it right. Or if they can't or won't, 55 10/12/04 - L&I - BILL 040595 they'll take it to another shop to fix it the right way and then go after that other particular shop to fix it. Ten years ago they came out with an anit-pollution license in the City of Philadelphia. I know there's a lot of body shops in the City of Philadelphia, say, 600, 700 body shops. I don't know how many are legal, but there were only six applications for this license. I was one of them.
For the spray booth, yes, for an anti-pollution license. And the other ones -- a couple good body shops and a couple dealers that had body shops. I was shocked.
People are spraying cars without spray booths is what you're saying?
Yes. And then they had a big investigation of the licenses. My shop's open from 7:00 in the morning until 6:00 in the evening. And one fine day 11:00, 56 10/12/04 - L&I - BILL 040595 here comes eight inspectors from the City of Philadelphia checking all over my place, licenses, this, that, everything. Which was fine, but that particular year there was a body shop open next door to me with no sign. I said, "Everything's good. How about next door? Could you check on them, please? I mean, they are my competition. Even though they're illegal, they're my competition." They said, "The door is closed. We can't." Great. Well, they said they were done, they're going to lunch. Well, at lunch, the door happened to open. So I quick ran out, they had two cars. I said, "The door is open." They said, "No, no, we're going to lunch." The City has to start working like after 5:00. A lot of body shops that are illegal work after 5:00. You have to have two shifts, I think.
Did you report that to anybody in the DA's Office or the 57 10/12/04 - L&I - BILL 040595 City's office about the inspectors not coming back?
The representative for Gus' Autobody, your name again, sir?
Mr. Ragguci, the circumstance you raise with regard to insurance companies trying to have a stake in what might appear to be an irresponsible way, similar to the sidebar I had with Richie Feder, is there any remedy you can offer that would address that problem? Because it goes directly to this issue of equity of opportunity again across the board.
Well, I'd like to 58 10/12/04 - L&I - BILL 040595 state my qualifications in that area. I'm a retired insurance agent and broker and I successfully ran a large book of car insurance business over 23-plus years, and I know from personal experience the kind of influence that insurance carrier claims departments can have in local communities as far as things like rotation lists are concerned, particularly in the outlying areas of Philadelphia. The remedy would be simply not to allow that to happen. The small guy deserves a chance. He runs an appropriate shop. He has appropriate storage area, appropriately alarmed and fixed up to reduce pilfering and stealing. And I don't think anyone should have an influence to keep the marginal or smaller operator from getting his share of being rotated on that list. I know how they function, the major insurance carrier claims departments because I worked for them for over a long period of time. And they have a lot of control over what shops get jobs and they have a lot of control over -- they could end up getting control over who gets on that rotation 59 10/12/04 - L&I - BILL 040595 list.
And there will be a process for whether it is a combination of the Procurement Department, Police Department, and the Department of Licenses and Inspections to review the qualifications of the individual towing company. So again, everyone will have an opportunity to be part of this. And if they qualify, there will be qualifications and they'll need to be met. But I think the rotational system will alleviate a lot of problems that I know exist and the Police Department knows exists. So I think this will be a big help. And I think many people will have an opportunity to participate in this program.
Good afternoon. Ralph Sposato, owner of Ralph's Automotive Service. 60 10/12/04 - L&I - BILL 040595
I'm here to say first of all that I support the rotation system and I can attest to the horror stories that we just heard. And on a daily basis I can testify to that it happens each and every day. I would suggest that most of the tow truck operators in the City of Philadelphia are legit and everybody has a right to earn a living. The problem in our industry is the tow truck chasers, the ambulance chasers. And we've heard about safety. What we did not hear about is specifically what it is that motivates these chasers to rush to the scene and get these wrecks. And that is that there's a kickback to them to the tune of 15 to percent in cash that various body shops 20 pay back to the tow trucks. And the question comes up, where does this money come from. And the money comes from substandard repairs, inferior parts, used parts and whatever that goes on in the industry. Outrageous prices. The whole thing is a sham, it's just 61 10/12/04 - L&I - BILL 040595 outrageous. I hear so much of it on a daily basis that I thought that the first opportunity that I would have to publicly address this issue, here I am and that is that. I'm here to answer any questions that you may have.
Mr. Sposato, you hit on something that is very, very important about the substandard work. And I know many body shop owners in this room can discuss the fact that a vehicle's repaired in January and starts to come apart, the paint starts to peel, the assembly is very, very bad. Could you talk about vehicles that you have inspected after the fact when it was done in one of these shops that is involved in this relationship?
I've had occasions in my career to inspect many of these cars. The problem comes in that once the deductible is waived or saved, the insurance companies, they wash their hands of it and the consumer is stuck with a substandard repair. And where do we go from here? Obviously, a shop that 62 10/12/04 - L&I - BILL 040595 usually engages in this type of a practice is not very ethical. It does not operate ethically. And when it comes time for you to take it to court, you may take a situation to court for a couple thousand dollars. Most people figure, well, it's not worth it, I'm not going to take the time. And we go on to next and next, and the problem goes on and on.
Could these vehicles that are repaired under these circumstances, could they be hazardous? Could the frame still be out of alignment? Could the vehicle be returned to the customer believing that they have a vehicle that has been repaired properly?
Absolutely. Especially when it comes down to the suspension components, drive components that indeed compose a safety hazard.
My name Charles Nygrd 63 10/12/04 - L&I - BILL 040595 representing Central City Toyota and Paul Brothers Autobody. We've been in business since 1905. It's a family owned and operated business, very prominent in the City. We have taken many steps to try to -- how would you say this -- to try to get those customers that we know that are getting towed, you know, we have a big push with our Toyota certified program which we are a Toyota certified shop. So, therefore, when somebody buys a new Toyota, we're hoping that they're going to want to protect their warranty and we give out discount card, things like that. We get zero cars towed into us, but do we see those cars? Yes, absolutely. Because we are Toyota, when somebody has a lienholder put on the check, it's Toyota, they have to take the car to us to get it signed. We look at the car and all the time we say "Was there a chance that you might have paid your deductible?" "No, I didn't. At the scene of the accident, et cetera, et cetera." Well, that person is now jeopardized 64 10/12/04 - L&I - BILL 040595 that they have a check that they can't get signed. Now, somehow or another this check gets signed. I could sit here all day. Do we keep a thousand dollars in cash on us all the time? Absolutely. There is just so much of this that has hurt our business. And again, we try to attack it proactively where we would actually shut our shop down to have training classes for all the body shops in the area. We send a fax out to everybody. And there's a lot of guys sitting here with us right now that they did send over their employees to get trained and that we were going to try to educate consumers that, hey, you're jeopardizing your car if you don't get it fixed right. And I think there's many issues to the problem. One of the things is that there's not licensing for body shops. You can basically just start a shop, you know, whatever City licenses you need, boom, you go ahead and you start something. So there's a lot of problems that are precipitating this, what we're all sitting here with right now at 65 10/12/04 - L&I - BILL 040595 least as far as the body shop end is. What we'd like to see is -- we support the rotation. Again, that's not our business, but we understand that there has to be a stop to what's going on out there right now. It's jeopardizing too many people.
Panel 4, insurance car rental industry, Erie Insurance, Insurance Federation of Pennsylvania, AAA, and Enterprise Car Rentals.
Some we know who's who, could you all just initially identify yourselves for the record, please?
Good afternoon, Councilman Rizzo and Mariano. My name is John 66 10/12/04 - L&I - BILL 040595 Doubman. I'm Secretary and Counsel for the Insurance Federation of Pennsylvania. With me is Art Lenke from AAA Mid-Atlantic. Bill 5 Stinger from Erie Insurance, they are members of the Insurance Federation and Bill is unavailable today; he will not be here.
You can decide among the three of you who would like to lead off.
Why don't I go first then on behalf of the Insurance Federation. Thank you for the chance to testify this afternoon. The federation is a non-profit trade association that represents insurers of all shapes and sizes doing business in Pennsylvania. And our members include most of the major auto writers who do business in Pennsylvania and in Philadelphia. Our auto insurer members continue to report some abusive pricing and customer treatment practices in the towing and storage business, not only in Philadelphia but around the Commonwealth. Few, if any, of the insurers, however, have readily accessible 67 10/12/04 - L&I - BILL 040595 data on the degree to which inflated towing and storage charges by themselves increase the loss cost for servicing policyholders. Nevertheless, these charges do increase these costs beyond what they should be. And judging by some of the worst stories, the inflated charges are significant in many cases. As you know from the Federation's appearances before City Council in the past however, we advocate a broad-based attack on all loss costs that pressure auto rates. We agree with the sponsors of this bill that the time has come to try to control towing abuses. Such an effort can't be anything but beneficial for auto policyholders and the companies which insure them in the City. All of this is not surprising, but it brings us to the key question in these proceedings, namely, will imposition of the rotational assignment system for towing disabled vehicles proposed in this bill 23 diminish unfair and abusive charges? The Federation believes that the changes in Section 9-605 will lead to improved 68 10/12/04 - L&I - BILL 040595 service to owners of disabled vehicles and give the City a much stronger enforcement mechanism to control marketplace abuses. In our view then, while this ordinance is not a complete answer, it is a move in the right direction. The current Philadelphia ordinance 9 on towing is well drafted, but it is widely perceived as ineffective. First, towers who choose top overcharge have done so with impunity under the price restrictions in Section 6 of the ordinance by inventing all sorts of incidental services representatives being connected to but not part of or controlled by the regulating towing charge. In some examples submitted to us by member companies, these add-ons include lot fees, clean-up fees, separate administrative fees and in one instance a $300 charge for two hours of advice. Insurers do not pay these charges without complaint, often negotiating reductions, but we must assume that many of these slip through the system one way or 69 10/12/04 - L&I - BILL 040595 another in whole or in part. A second criticism of the current ordinance is that the City does not have the manpower, resources and a serious commitment to enforcing it. The City is regarded as fairly good on initial licensing, but any interest in ongoing enforcement has be scant according to most commentators. With that background, Councilmember Rizzo's bill seems a valuable improvement in two respects: First, by putting an end to the race to the wreck scenario. It promises a more orderly, perhaps safer and certainly more ordered response to the need for towing services. After all, virtually anyone who has been in a vehicle which has been damaged in an accident understands that all the participants are in a very disturbed emotional state. To the extent possible, they should be spared high pressure salesmanship from any direction. To the charge that this orderly system will be anti-competitive, one asks what legitimate competitive considerations are being lost? Is there any virtue to allowing 70 10/12/04 - L&I - BILL 040595 the tower with the fastest truck or the most propitious location for his scanner or the most persuasive driver to get the job?
Early bird gets the worm is as American as apple pie, but perhaps needs to be tempered if it sets off races on Philadelphia streets and confrontations and high-pressure tactics at accidents scenes. Most importantly, insurers see this new system primarily as an improved market enforcement mechanism. That is because any tower which routinely violates the standards in the ordinance can be ousted from the rotating business. The City can now insist more forcefully on compliance. The Federation believes that the City should have this enforcement power in this environment. The Federation's endorsement of the bill, however, comes with three cautions: First, amended Section 4-D provides that the City will establish any fee it makes and the permissible tower fees by regulation. Obviously, informed by the weakness of the current ordinance, the Federation recommends 71 10/12/04 - L&I - BILL 040595 that the drafters must very carefully proscribe acceptable charges and rule out any others in connection with a towing job and storage of the vehicle. Coincidentally, the City should not see this as a profit center. Any fee the City charges should be a minor administrative charge to defray the cost of a clerk and a software program. Enforcement charges should be advised on violators. Second, in order for the system to make a marked improvement, the City must allocate resources to active enforcement, especially during the initial stages of the rotational program. Third and finally, proposed Section 17 4-E should be changed to allow owners and operators of disabled vehicles to make their own towing arrangements to which they may have access through their insurance or their automobile club. Assuming this can be done consistent with highway safety, there's no 23 reason for the City to intrude on the citizen's rights to make their private arrangements as long as the public interest 72 10/12/04 - L&I - BILL 040595 isn't in danger. This turns out to be just as important as protecting the right of the owner or operator to designate a destination for the tow. Protection of the owner operators' rights in both these respects turns out to be crucial to protect the insured's right to make the most advantageous repair arrangements under his insurance. This ties into other aspects of the towing and storage cycle with which this proposed ordinance is not directly concerned. Nevertheless, the ordinance should be drafted where possible to protect the individual driver's ability to make his or her own arrangements. Again, the Federation applauds this effort of Council to come to grips with these problems. If the Federation can be of assistance in any fashion in establishing the system, we'll be happy to oblige. If anyone has any questions, I'd be happy to entertain them.
Any questions for this witness? 73 10/12/04 - L&I - BILL 040595 (No response.)
Good afternoon, members of City Council. I'm very pleased to be here today on behalf of AAA Mid-Atlantic to provide testimony in support of a rotational towing system for the City of Philadelphia with the caveats that I will explain. As you may know, AAA has advanced the interest of motorists for over 100 years. AAA represents one-quarter of all US households and in the City of Philadelphia has 179,000 members. My name is Arthur Lenke and I've been with AAA for more than 30 years and I'm currently the managing director of emergency road service operation for AAA Mid-Atlantic. I oversee four operation centers, one in Philadelphia that handles over 400,000 emergency road dispatches each year, 180,000 are in Philadelphia. 5 million dispatches a year. I'm also responsible for 74 10/12/04 - L&I - BILL 040595 fleet operations of our 125 owned and operated vehicles and drivers and our emergency road service contract network of 700 independent facilities. AAA views the creation of a rotational towing system in the City of Philadelphia as both a safety and a consumer issue. Motorists should not have exorbitant towing or storage fees imposed upon them. AAA supports a measure that will give structure to the selection of towing companies and protect the public from predatory towing practices. But AAA believes that the language in the legislation must be clear. Members of the public, including AAA members should be able to continue to use whatever towing service they choose as long as their vehicle is not blocking traffic. The amended language in the legislation is not clear. " As long as traffic can safely move around the disabled vehicle, drivers should not be forced to be towed by the tower on the rotation list. AAA believes it is important to preserve the motorist's right to determine who makes the tow, whether it be AAA or another organization that the motorist prefers. Amended language in the legislation also says that the City may charge a fee in connection with the towing of vehicles. This fee should cover the cost of a rotational system, but the City should not simply generate revenue from the misfortune of motorists. Any driver who has just been involved in a crash, even a minor one, is usually emotional and vulnerable and easily open to being taken advantage of. That's why AAA has worked diligently over the years to provide its own members with peace of mind by contracting only with legitimate and licensed towers that will provide the quality of service that AAA members expect and 76 10/12/04 - L&I - BILL 040595 appreciate. We are familiar with tow truck operators that race to the wreck so-to-speak to take advantage of both the vulnerable motorist and a police officer who usually wants to see a crash scene cleared as soon as possible. AAA believes that it is in all motorists' best interest that the drivers involved in collisions get prompt, reliable, and credible towing assistance at a reasonable price. AAA believes that tow truck operators also deserve a fair price for their services. Because this legislation contains a mileage reimbursement rate of $2 per mile, I offer this for your consideration. AAA currently reimburses its tow truck contractors $3 a mile. We believe that this is fair and reasonable especially given the recent dramatic increases in fuel costs and the insurance market that has more than doubled the typical towing company's insurance rates over the past two years. In conclusion, as a representative 77 10/12/04 - L&I - BILL 040595 of the best interest of the motoring public, AAA wants drivers to be protected from some of the creative, incidental charges imposed on them, creative wincing fees, waiting fees and clean-up fees, to name just a few. We hope that this legislation can and will serve as an opportunity to reign those costs and more importantly eliminate the practice of body shop bounties which is in large part what the race to the wreck is all about.
I thank you for the opportunity to present AAA's position. AAA knows that buying and operating a vehicle is a major investment for consumers and for families and it's what keeps us mobile. When a vehicle is involved in any kind of collision that takes it out of service, its owner is rightfully concerned about any cost involving getting the vehicle back on the road in good repair. Safety and affordably removing the vehicle from the road is the first step in that process. Thank you.
Thank you, Mr. Lenke. Councilwoman Brown has a question. 78 10/12/04 - L&I - BILL 040595
Thank you for your testimony, gentlemen. Does AAA participate in a rotating kind of arrangement in any other municipalities anywhere in the country where you can put that in context for us?
Not directly. Many of our independent contractors are on police rotation schedules in many municipalities throughout the Mid-Atlantic region.
Byron Solvenson with Enterprise Rent-A-Car. I think Mr. Lenke basically summed up our position as well. We're here sort of on behalf of the insurance industry because we are self-insured as well as we're here sort of on behalf of the general public because we face both positions. Many times we're left at the peril at the scene of an accident because our customers, like you've heard some of the 79 10/12/04 - L&I - BILL 040595 testimony, are distraught. They don't know what's going on. We as the owner/operator of the vehicle don't always get a chance to field our opinions on where we want our vehicles to go, where we want them towed to. So we're left at the mercy of whoever gets there first. And a lot of times those tow bills that come across, they know that if we want our car back we're going to pay up or we won't get the car. While a lot of consumers pass this on to the insurance companies and they may or may not pay their bill, we're left stuck with that bill. Will that increase our prices to consumers over time? It has to. So it's of our opinion as Enterprise Rent-A-Car, Mr. Lenke pretty much summed up what we would like to see in the bill as far as having the rotation as well as if we do have the choice to use one of the preferred tow companies that we normally deal with.
Let me ask you this question. If I'm visiting Philadelphia and they offer that insurance when I rent a car, why should I get it? 80 10/12/04 - L&I - BILL 040595
There's many different benefits to it. If you're involved in an accident, you can pretty much walk away from the car.
If I didn't get that and got in an accident like one of these stories that were told today, will you pay the money that the -- does your body shop pay money, cash to people?
Does your body shop pay cash to people to get cars? They're your cars. It's not like you're getting my car so I walk away from it and "I'm going back to Boston, you take care of this." And I just gave it to one of these horror story wreck chasers. What do you do then? If one of these guys have your car, what do you do?
I guess we're coming back after you and we're coming back after them.