Detroit works to finalize competitive bidding for towing, launch app

Mackinac Island — Detroit Mayor Mike Duggan said the city is close to implementing the last phase of an overhaul to the city's towing practices following a decade of corruption surrounding the operation.

The mayor made a vow to have Detroit's newly-appointed police chief reconfigure the municipal towing system after federal authorities conducted raids last month at City Hall and the homes of two council members and their chiefs of staff as part of a corruption probe centered on towing. 

So far, the city has implemented three elements of a four-step plan formerly crafted by now-Detroit Police Chief James White that incorporates competitive bidding and cuts out bad actors in a move toward "complete transparency," Duggan told The Detroit News in a Wednesday interview at the Mackinac Policy Conference. 

The city also has launched a police department-led towing company to prevent abuse and a towing rotation system based on geographic location as opposed to a first come, first served approach.

Earlier this year plans to move to an open competitive bid were paused after the Detroit Board of Police Commissioners voted to extend existing permits.

The city in 2011 began allowing towing companies to work under permits, which don't require as much documentation and scrutiny as contracts and are not competitively bid.

The Detroit Board of Police Commissioners voted 8-1 earlier this month to lessen its role in selecting towing companies, moving the process to the city's Office of Contracting and Procurement.

The proposed change to establish a competitive bidding process to replace the permit system is now set to go for a public hearing before the City Council on Oct. 11.

"There is no excuse for this city in 2011 giving a group of towers the right to operate with no competitive process and we’ve been working to undo that since I’ve been here," said Duggan, who took office in 2014. "We’re two-thirds of the way through and we’re going to finish it now."

The competitive process would require towers to be on a rotation based on where they are located, Duggan said, and all assignments, how much a tow and/or storage costs would be publicly recorded.

The final step is creating a smartphone app for residents to easily find qualified towers with set rates or locate their vehicle if it has been towed. The mayor said he expects to have it implemented in the next few weeks. 

The police department previously changed its practice of allowing towing companies that find stolen cars to claim the tow work after officials uncovered evidence that some towing firms were in cahoots with car thieves. 

As part of its towing reform, the police department in September 2018 purchased six trucks and took over part of the city's tow operations, while keeping 22 private companies in the rotation. After an outcry from towers, then-Chief James Craig agreed the department would tow less than 25% of all vehicles, leaving the rest of the jobs for the private companies.

Since the change, six of the private firms have been removed from the rotation for various infractions, including three instances of fraud, according to city records.

Duggan said the contracts were terminated based on "what we believe was inappropriate behavior." 

"They (the firms) have fought us tooth and nail on about a dozen lawsuits and we prevailed against all of them," he said Wednesday. 

The mayor added towing operations have been a bad situation for the city and, "if you had asked me where the next problem would have come from, I would have predicted towing," he said. "It’s ridiculous."

Per rules set by the city's Towing Rate Commission, towers might charge between $150 and $300 for a tow and $15 to $25 per day for storage, depending on the size of the vehicle.

Detroit Towing Association President Barry Foster said despite months of trying to work with the police board and mayor's office, a group of minority and family-owned businesses with a combined 607 years of service to the city "were shut out."

With their permits now set to expire at the end of September, the DTA plans to move forward serving the city, but Foster said they are concerned about a chaotic process ahead.

"We will do what we need to do to feed our families, but we will also plan on participating in the city process as the experts in professional towing practices. They need us. We need them," Foster said in a press release last week. "One of the keys to public safety is consistency in policies and procedures. The DTA believes changing police authorized towers on a frequent basis could wreak havoc on the city."

Duggan did not weigh in Wednesday on the high-profile raids last month at Detroit City Hall and at the homes of Councilmembers Janeé Ayers and Scott Benson and their chiefs of staff. He previously said he'd withhold judgment until federal authorities conduct their investigation.

The News reported that the FBI is looking into whether anyone personally benefited from campaign contributions or nonprofit donations and whether they extorted business people.

Duggan noted the ongoing federal investigation is the third in four years that has arisen from towing operations. 

A 2011 report from Detroit's auditor general found that towing contracts were being approved without City Council's consent. Instead of fixing the process, the city began allowing towers to work under permits.

The five-year towing permits were extended in 2016. In April, the police board extended the contracts a third time, raising the ire of police officials who said they hadn't been notified about the extension.

Prior to the 2016 extension, former deputy police chief Celia Washington admitted to taking a $3,000 bribe from towing titan Gasper Fiore to help him get another permit and circumvent rules that prohibited tow company owners from having more than one firm in the towing rotation.

Duggan has said the permit system caused other corruption problems. In 2017, he's said, six police officers were indicted for taking bribes for towing rotations. All six were convicted and the cases stemmed from the permit system "with a preferential group of people in a rotation that people don't fully understand," the mayor has said. 

srahal@detroitnews.com

Twitter: @SarahRahal_