City Councilman Richard Fimbres seeks to shrink this year’s budget gap by adjusting city-towing contracts so the city gets a cut of money made from auctioning unclaimed impounded vehicles.
On Tuesday, the council agreed, voting 6-1 to direct the city staff to find a way to maximize money from impounded vehicles.
While nothing is settled, the idea is to emulate Pima County, which collects 60 percent from auctioned vehicles — bringing in about $1 million in revenue.
Proponents say the change will help fill city coffers.
“I’m looking into finding ways for cost recovery of services, and this is another avenue to do that,” Fimbres said.
Tow companies are wary of the change. It will lead to higher costs for folks to retrieve their vehicles from impound lots, they said.
“This is bad for the people,” said Jeff McDonald, president of Gary’s Towing, which holds two of the city’s four towing contracts. “People are going to be paying more money.”
Tucson drivers could see the average cost of a tow jump from the current $50 to the county’s average of $200, said Jim Mooney, owner of Frontier Towing.
The base cost of a tow in Tucson is about $28, while in the county it’s $63. Those amounts don’t include mileage and storage costs, which vary by vehicle. Nor do they include the $150 fee charged by municipalities to retrieve a vehicle.
McDonald said the city already charges him a $35 referral fee for each car his company tows. The money his company makes from abandoned cars offsets existing overhead costs, he said.
Additional hits to towing companies’ revenue streams, he said, would likely force them to raise their prices.
Before 2011, no municipality in Arizona received money from auctioned impounded vehicles.
That changed when a Pima County Sheriff’s Department employee, Frank Gonzales, said towing companies shouldn’t keep all the money. The county changed its contract and now receives a 60 percent cut from abandoned-vehicle sales.
The change brings in about $1 million more a year for the county, Gonzales said.
Gonzales said the city would likely have collected about $10 million between 2010 and 2013 if it had had a similar policy.
Mooney and McDonald said they can’t see how the city would collect as much as Gonzales and proponents anticipate.
McDonald said he fetches around $700 for each of his abandoned cars.
Mooney, whose company owns the city’s other towing contracts, said most of his cars are junkers and bring in an average of only $200 to $300 apiece.
While the Tucson Police Department doesn’t have exact records on auctioned cars, TPD estimates 1,476 vehicles out of approximately 9,000 impounded overall were auctioned in 2013. Those estimates fluctuated over the past five years from a high of 1,636 in 2009 to a low of 898 in 2012.
If the city does wind up adopting a plan similar to the county’s, TPD projects a potential increase of up to $394,000 in new revenue.
Fimbres said the discrepancies exist between projections because towing companies don’t reveal how many vehicles they sell. So Gonzales was basing his numbers on available data at the time, Fimbres said.
One benefit of this change, he said, will be making towing companies more transparent.
“They’re not keeping records,” Fimbres said. “And for clear transparency, this is going to allow us to take a better look at this thing.”
The lone dissenting voter, Councilman Steve Kozachik, said the city shouldn’t close its budget gaps by selling poor people’s cars.
“Something doesn’t feel right about this,” Kozachik said. “It’s almost as though we’re setting up a false incentive to auction people’s cars off to help us with our budget.”
Kozachik said the city should find ways to help people down on their luck keep their vehicles.
A draft of the measure will come up for a final vote at a later date.