To my right is supervisor tang, the vice chair, president chu will be joining us soon and we are also joined by supervisor scott weiner today. The clerk is erica major and id also like to thank the sfgov tv folks who are filming our meeting today, Jessie Larson and josh what alexander. Madam clerk, do you have any announcements . Please make sure to silence all cell phones and electronic devices. Speaker cards and all documents to be included as part ftd file should be submitted to the clerk. Items acted on today will appear on the november 4 board of supervisors agenda unless otherwise stated. Item 1 is Municipal Transportation Agency to discuss auto fees for stolen vehicles. Supervisor weiner, thank you. Thank you, madam chair, for angendizing this item today. I very much appreciate it. Today, colleagues, this hearing which i called for this month has as its purpose a review of our citys automobile towing policies and fees with respect to stolen vehicles. And i called for this hearing because the mtas contract with auto return, our vendor that provides towing services, expires next year and will be renegotiated and then ultimately presented to the board of supervisors for approval or rejection. So rather than wait for this contract to come to the board of supervisors and then at that point have a discussion after the negotiation about the treatment of stolen vehicles, it seems it me that now is the time to do it. So the purpose of this hearing is to have a discussion about the citys towing policies with respect to stolen vehicles, how the fees and penalties are structured, how stolen cars that are recovered are structured and how we may change the contract to treat the owners of stolen vehicles in a better and more respectful and fair way. I want to be clear that i am, the purpose of this hearing is not to criticize auto return. Actually i am a fan of auto return. This city has a long and sorry history in terms of our towing contracts and corruption and other significant problems and auto return came in and really drained the swamp and cleaned up towing operations in San Francisco and our towing system is much more professional than it used to be. This is not about criticizing auto return. The problem is not auto return, its the contract itself. And right now the contract does not treat the owners of stolen vehicles fairly. It used to be that if you had your vehicle stolen and then it was abandoned in San Francisco and towed for many years you had your towing and storage and administrative fees waived, you didnt have to pay them. That changed in about 2005 when the board of supervisors i think incorrectly repealed that waiver. Looking back at the record, it looks like the Police Department did research and found that we were an anomaly, that we were one of the fee venues that actually provided that waiver which of course is fine with me because San Francisco often leads the way and we should lead the way here as well. So in 2005 the board and the mayor repealed that exemption. The current contract, as i mentioned, is with auto return. Auto return processes, tows approximately 45,000 vehicles a year, thats in the last fiscal year. Of this 45,000 towed vehicles, approximately 2500 are stolen vehicles so thats about 5. 6 percent. So were talking about a pretty small universe in the big scheme of things. When a vehicle that has been reported as stolen is found on the street and is going to be towed, the San Francisco Police Department contacts the owner and gives him or her 20 minutes to retrieve the vehicle and that makes sense because we dont want Police Officers to be having to spend all day babysiting a stolen vehicle. So thats not the problem in my view. The problem starts once the vehicle then gets towed and gets placed and stored with auto return. The m. D ta assesses a 266 administrative fee. That fee is waived if the victim presents a Police Report indicating that the car has been stolen. In addition the mta and Police Department, to their credit, will waive parking tickets incurred as a result of the stolen vehicle being abandoned. However, the owner does have to pay the 220 tow fee, in addition to storage fees that accumulate once the vehicle is stored. San francisco residents receive a four hour grace period for stolen vehicles so if they are able to retrieve the vehicle and get down there within 4 hours of its tow they dont have to pay. Nonresidents receive no grace period so if your car is stolen in oakland and dumped in San Francisco you receive no grace period whatsoever. At that point, either immediately for nonresidents or 4 hours for residents, storage fees begin to accrue and they accrue and they accrue. So if for rafr reason you dont learn your vehicle has been recovered for some period of time, if you are out of town and you are notified and you are not able to get down there, you could have to pay significant storage fees and we have heard over time from various people who have accrued hundreds or even thousands of dollars in storage fees and there are times when those fees are higher than the actual value of the vehicle, in which case typically people will simply not retrieve the vehicle and auto return per the contract, per state law, will simply auction off the vehicle to pay for the fees. So the system is not fair, the contract is not fair. When you have your car stolen uefr been victimized by a xripl criminal and we shouldnt be victimizing that victim yet again by saying you have done sluertly nothing wrong, your vehicle was stolen, it was dumped somewhere in San Francisco, it was towed and now heres a bill for thousands of dollars. No one should have to be subject to that. While some people have comprehensive insurance that can then reimburse them for the cost of the tow and the storage, we know that many car owners do not have comprehensive insurance. Comprehensive insurance is expensive and particularly for owners of older vehicles they often do not have comprehensive insurance, it tends to be something that you have for a newer vehicle and older vehicles, of course, are the ones that are most likely to be lower in value so its worth just abandoning your vehicle at auto return rather than paying the fees and retrieving it. So today, colleagues, the goal is to really have a discussion to hear from the mta and from the Police Department and from auto return about what the system is, just making sure that we have, you know, know exactly what the facts are, and then we can have a discussion about providing in my view guidance to the mta about what we expect when this contract comes to us next year. It is my intent after this hearing in the next few weeks to introduce a resolution at the board indicating our intent formally to the mta and really sending a clear message and again trying to get ahead of the curve on this to give the mta guidance on what we expect rather than waiting for the contract to come to the board and then creating a kerfluffle because theres something about the contract that could have been fixed and we didnt fix. With that, colleague, if there are no other comments we do have a few presentations today and id like to start with the San Francisco Police Department, we have commander ali here, the Operations Commander of mta commander ali good morning, mikail ali, San Francisco Police Department assigned to mta and i must applaud you, supervisor, you clearly have the issue in hand. Thats because i have good staff. The one thing i would say, we do do our part to lessen the impact of the vehicle stolen which is not unique. We make an effort to recover them through proactive policing as well as respond to incidents where others identify the vehicle as being stolen. We attempt to lessen that impact by all persons by having, while the officer is in the field, making an attempt to contact the owner of that vehicle, waiting the 20 minutes of time not just for San Francisco residents but for all, particularly in this day and age where your ability to contact folks by way of cell phone is instantaneous and then in many instances you have individuals who actually are working or playing in San Francisco and their vehicle was either stolen or recovered so it affords them an opportunity to avoid that process of having their vehicle towed. So thats the only thing i would add. We do abide by all the ordinance rules in terms of waiving the 194 administrative fee the Police Department charges when they are involved in these types of towing a vehicle. For that waiver, how does that work . Is it an easy process for people to get that fee waived . It is an easy process. What takes place is at the hall of just stus justice they come down and receive the waiver from the ofrsers that work the tow desk. All vehicle tows, information for the public on how to go about the various processes, whether to simply pay the fee and recover the vehicle, if they have a concern that the tow was improper we have procedures in place to evaluate those circumstances and to remedy them if in fact they were improper. So those things are in place now. Thank you. Supervisor tang has a question. Just to build on that, if someone has their car stolen do they have to provide some kind of Police Report or Insurance Claim form that their car was stolen. The lions share of folks with stolen cars, they are aware of their vehicle being stolen prior to it being recovered and towed by the Police Department. There is that instance where the vehicle is towed for some reason, maybe it was improperly parked and then you become aware that your car was towed and the circumstances lead up to the fact that it was actually stolen. So thats the minority of circumstances. So when a car is stolen, is entered into a statewide system and then a nationwide system. The statewide is called the California Law enforcement Electronic Telecommunications system. Every Law Enforcement agency that deals with these types of incidents enters that information so if your car is stolen in San Francisco and its in san jose, for that matter, san jose officers will become aware, they can also have the mechanism by which they can contact clearly i dont think they would have a policy of waiting 20 minutes for nonresidents just as we dont as well. So essentially its pretty easy for, again, if someone was trying to get this fee waiver that it should already be in the data base that its been stolen. Absolutely. Its typically in the data base, the officers who work those assignments have access to the information, they can see it was stolen and the person typically will be advised and that waiver is made. In terms of the distinction between residents and nonresidents and this is something that to me i think is an issue. I dont and this applies, well talk about more with the mta to me i dont think it should matter whether the person is a resident or a nonresident. If theyve been victimized and had their car stolen, i understand the desire to maybe help out San Francisco residents a little bit more but in the end whether someone lives here or is visited or never set foot here and had their car dumped here after it was stolen, to me they should be treated the same. Does the 20 minute period that sfpd stays with the car, does that apply to the residents . It does. The waiver of the 190 fee is just for San Francisco residents . It is. Whats the rationale behind not applying that to nonresidents. Its the ordinance. The ordinance only speaks of waiving the fee to residents of our city. These are all board of supervisors ordinances which of course the board was then removed from this whole process when the voters voted on prop e in 1999 so well definitely, thats an issue were going to be bringing up to try to equalize the treatment. Thank you very much, commander. Supervisor. Okay, so now i want to call up the sf mta which administers the contract with auto return. Good morning, supervisor, steve lee, sfmta, manager of financial contracts and services. Id like to begin by saying i cant imagine that the mta wouldnt take this opportunity to make things better for people who get their car stolen. I totally agree that this sort of situation adds insult to injury in terms of when you get your car stolen. Were going to do everything we can to work with your offices to make sure we cover as much as we can in terms of making things better. Supervisor weiner, you spoke to a lot of things i was going to mention so i think i will start with the contracting of the existing agreement and go into what we anticipate in terms of a new agreement. So the existing agreement today is based on volume, multiplied by the rate that is set by auto return for recovery of storage and fees which goes to pay for their operating expenses. So it really depends upon volume. When they first started the contract in 2005 the volume was in the range of 75,000 vehicles and has dropped dramatically to 45,000 today so we want to move away from the volume type model agreement because its too volatile and too risky for a vendor. We may be considering an operational reimbursement type model where all operating expenses are reimbursed and the vendor is paid a flat Management Fee. This will provide the mta with the flexibility it theeds in terms of adjusting Service Levels and the fees that we charge. If theres any questions you have . A few things. So as i understand the auto return collects about 531,000 last fiscal year. Correct. Relating to stolen vehicles. Thats correct. And thats in the contract. So whats the total amount of revenue collected by auto return . Im sorry . What is auto returns total amount collected for all vehicles . We estimate it to be in the range of 16 million. So its a pretty small percentage of the total. Well, i kpbts speak to what it cost them to return the entire operation, so what were really talking about is the net income they would have to absorb in terms of providing this relief. Right. And in a renegotiated contract that provided your complete waiver for stolen vehicles or a significantly longer grace period or lower storage fee or whatever, however it might be structured, that lost revenue would have to probably be reabsorbed through the rest of the contract. Possibly. I mean when we go out to and we do a new agreement it is really early to tell. We really need to see the proposals to know what its going to cost us to run the business. Were hoping to see some savings that can apply to some of the reductions but if we were to eliminate that completely, yes, it may be spread among the other fees. Definitely would be abdomen sored by the mta because a new contract, as i mentioned before, possibly will be doing an annually approved operational budget where all expenditures are reimbursed and the operator is just paid a flat Management Fee for their services. I definitely dont want to deprive the mta of revenue so to me in terms of determining the cost structure that can be determined within the contract. There are a couple ways this would be done, one would be no charges for stolen vehicles, one would be a longer period instead of 20 minutes it could be days or even weeks. There is an argument we dont want people to be lackadaisical in terms of recovering their vehicle, we want people to come get their vehicle in a timely way, or a longer time period and less of a storage fee once the grace period ends. Do you have any thoughts on those various options . They all vary and it could be a combination of whether we relax the time to retrieve the vehicle, waive the storage fee or waive the tow fee altogether in part or whole. It could be a combination of things and when we look at it later well really start to pencil out what is the impact financially to the mt aflt. Its hard to commit to it now without seeing the proposals but i think in terms of the contract model that we probably will pursue it provides the mta the ability, even outside the contract, to implement these policies without impacting the vendors bottom line. In terms of what i asked commander ali about resident versus nonresident, other than the fact this was in the statute, was there any policy rationale that you can think of in terms of providing waivers to residents versus nonresidents. Its the same thing. Whether you live in San Francisco across the bridge or right at the border of daly city i think it, i think youre right, that it should apply cross the board. I agree with you. I think theres no reason to provide waivers to residents and not nonresidents, i think they should be treated the same. Its the same victimization so im glad we see eye to eye on that. Supervisor tang has some questions. Just to get a better understanding of the landscape you mentioned that we started off with about 70,000 cars towed then it went down to about 45,000. Im curious if you have the breakdown as to how many are stolen from San Francisco residents and then stolen from outside of San Francisco residents. Right, those figures were provided. 65 percent of stolen vehicles, stolen vehicles for 2014 was about 2500 vehicles. About 65 percent of those vehicles are San Francisco residents so thats about 1400. Okay, thank you. Okay, if there are no further questions, we appreciate it. Thank you. Im sorry, one last thing. In terms of the timing, my understanding is the contract expires june 30th of next year . Thats correct. So what is the time have you begun negotiations with auto return . Im sorry . Has mta begun its negotiations . We dont know who to negotiate with. So there will be an rfp yeah, the rfp will likely be released early january and then go through the process of pre and preproposal conferences and submitals so in terms of negotiating were looking at spring of 2015, coming back to the board of supervisors for approval before the expiration. Okay, terrific. Thank you. Okay, now we have John Pendleton from auto returns who is auto returns chief financial officer. Thank you. I really came prepared to offer you perspective, we work in 7 jurisdictions around the country so if youd like to know more about that i can tell but that. I can give you more detailed answers how the process works for citizens within the context of the Police Departments process. I think it would be both to talk about the process and it would be helpful to hear about other jurisdictions where auto return works,. Let me start with the later because i have it at my fingertips. We went out and spoke to each of our Service Managers that work in each of these jurisdictions. If San Francisco you understand administrative fees are being waived. In inaudible there are no fee waivers. In concord they also waive the administrative fees but they do that for all people who are towed, not just the residents of concord. In kansas city the tow fee is discounted 50 percent and theres a 4 day great period for the storage. In indian nap Police Nothing is waived. In baltimore county, likewise nothing is waived and the same is true for the Pennsylvania State police where we are conducting a pilot. There are incidents in all of these jurisdictions where there will be extenuating circumstances where the Police Department might choose to waive more of the fees just due to the circumstances so thats what we see from the other jurisdictions and then we also hear from all of our Police Department clients that they also are very mindful of the fact that many of the individuals, there is Insurance Coverage in place so they tend to try to incorporate that into whatever policy they put into place as well. I mentioned this at the beginning of the issue, comprehensive insurance. I think that was part of the rationale of eliminating the waiver because if there is comprehensive insurance obviously we would prefer for the Insurance Company to pay for the towing costs and not for the city or auto return to absorb that. Actually we have not been able to get the data yet, were trying to find out what percentage of vehicles actually have comprehensive insurance and i suspect, you know, its probably very high for newer vehicles and very low for older vehicles. Do you have any sense of that . I would agree with your atefrptions on that but its very difficult data to come by unless you have a policy implemented where you are actually asking people for that information as part of your process. I wish we had more information to share with you about that, we just dont have that information because we dont collect that from any individuals. Were trying to get that from the state department of insurance so well let you know if we find out. Okay. Okay, and in terms of the process here can you walk us through the process . Its very consistent with what youve heard already but ill walk through the steps. These vehicles are all, when they are towed, they are towed by the San Francisco Police Department. We do not release any vehicles towed by the San Francisco Police Department unless we have the written release from the department. The written release comes with instructions about what we are supposed to do in terms of waivers of any type so its not just stolen vehicles but whatever type of release, if theres any waiver to be applied, the instructions come to us in writing. That actually is in the process of changing, the team at bryant street is in the process of using our system so they can send us those instructions which is better because it makes it a more streamlined process. But when we get those instructions, when the individual arrives at our facility, we go into the system, its all automated based on the type of tow. Our team goes into the system and puts in essentially negative amounts and that results in the total amount of fees being paid on the vehicle being reduce ode by the amount of the waiver. For example, all of these stolen vehicles, if its a San Francisco resident as youve been told, we receive instructions to waive the admin fee and prior to that the pd has also waived their administrative fee. We now collect that fee on behalf of the pd so we are now getting instructions from them not to apply that fee in the same instances. In terms of the fee structure, so we know theres an administrative fee from the Police Department, 195, the mta has an administrative fee of 266, those can both be waived for San Francisco residents. Then there is the tow fee, as i understand it, its 220. 75 and then what is the storage fee . The storage fee is different on the first day. The first four hours are free and just to clarify, that four hour grace period is applied to all towed vehicles, not just stolen vehicles. Okay, we had heard it was only for its for all. Thats a