INTEROFFICE MEMORANDUM
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David Miner, Chief of Police
DATE: April 25, 2025
SUBJECT: Agenda Item 16 - Amendment No. 2 to Official Police Tow Truck Service Agreements with G&W Towing and Southside Towing
The staff report for Agenda Item 16 has been amended for accuracy and clarity:
The paragraph titled Reduced Operator Revenue has been amended to include details on the specific court cases and operating conditions that have affected revenue from storage fees.
Attachment: Amended Staff Report
NEWPORT BEACH POLICE DEPARTMENT
OFFICE OF THE CHIEF OF POLICE
Amendment No. 2 to Official Police Tow Truck Service Agreements |with G&W Towing and Southside Towing
April 29, 2025
16-2
Increased Operating Costs
Since extension of the agreements in 2021, both Operators have reported substantial increases in operating costs, most significantly in insurance premiums, especially for Excess Liability coverage. For example, Southside paid $4,250 for its Excess Liability coverage upon initiation of the towing agreement in 2016, but its renewal for 2024 cost $87,597, an increase of 1,961%. G&W reported a 209% increase in Excess Liability premiums over the same time frame. Neither Operator had claims against their policies that would have increased premiums. Towing rates, the most significant source of revenue for the Operators, only increased 27.1% over the same timeframe. The table below shows the increases in insurance premiums compared to the increases in towing rates:
Excess Liability Costs % Increase
2016 2024 Excess Liability Towing Rates
G&W Towing $ 22,552 $ 69,745 209.3% 27.1%
Southside Towing $ 4,250 $ 87,597 1,961.1% 27.1%
Reduced Operator Revenues
Both Operators have seen reduced revenues due to changes in case law and Police Department practices. The two cases with the most impact are a 9th Circuit decision that 30-day vehicle impounds for driving on a suspended license were unconstitutional and a more recent decision from the Los Angeles Federal District Court that found vehicles could not be towed for unpaid parking citations without a warrant, except under limited circumstances. Both decisions resulted in fewer vehicle impounds by Police Department employees and a reduction in corresponding vehicle storage fees.
Both Operators have seen reduced revenues due to changes in case law and Police Department practices. There have been two court cases during the life of the agreements that have had a significant impact on towing operator revenues. In 2017, the 9th Circuit reversed a lower court decision in Brewster v. Beck, finding that 30-day vehicle impounds for driving on a suspended license were unconstitutional. In a more recent decision from 2023, the California Appeals Court in Coalition on Homelessness v. City and County of San Francisco, held vehicles could not be towed for unpaid parking citations without a warrant, except under limited circumstances where the vehicle was a hazard to traffic.
Both decisions resulted in fewer vehicle impounds by Police Department employees and a reduction in corresponding vehicle storage fees.
Towing Rates
The original agreements included towing rates the Operators can charge to owners of impounded vehicles, which have been updated annually, also in accordance with NBMC §5.15.080. A recent study of regional police agencies’ towing rates showed that the Newport Beach towing rates were $417, which is 2.6% below the regional average of $428; therefore, the Police Department is requesting to increase towing rates by
2.6% ($11). This increase would place Newport Beach’s towing rates in line with the average regional towing rates described in Attachment C.