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HomeMy WebLinkAbout10. Towing Agreements AGENDA MEMO DATE: June 28, 2011 TO: Mayor and Members of the City Council FROM: Office of the City Manager By: Rick Esteves, Chief of Police SUBJECT: VEHICLE TOWING AND STORAGE AGREEMENTS RECOMMENDATION That the City Council renew the towing Agreements with United Towing Service, Inc. and Titan Transportation, Inc., extending the towing services for a three-year period ending June 30, 2014. BACKGROUND For the past 36 years, United Towing and Doug’s Tug have provided service to our Police Department and City. In 2009, the City added a third tow company, Titan Transportation. The tow companies are currently licensed in Downey, and maintain their storage facilities in the City. Their close proximity enables us to routinely monitor and evaluate their service and safety practices. The affiliated tow companies have provided a high level of service to the Police Department and the City and have a proven record of performance. Unfortunately, during this past contract year, Doug’s Tug went out of business. Nevertheless, United Towing and Titan Transportation continue to easily meet the needs of the City. The tow companies respond to various locations throughout the City to tow and store seized vehicles. In addition to these basic services, they are requested to remove debris from resulting accidents, and perform any work that may be necessary preliminary to towing, such as removal of vehicles from ditches, righting overturned vehicles, or separating entangled vehicles within the city limits of Downey. Their timely response to traffic accidents, impound requests, and crime scenes are critical to the Police Department’s overall effectiveness, and essential to providing a professional service to the residents of Downey. Because the companies work on a rotational basis, a tow truck is routinely available. Our City does not currently solicit a franchise fee (where a tow company pays an upfront fee for its exclusive right to provide the city’s towing service) from the contracted CITY OF DOWNEY, CALIFORNIA tow companies; however, there is an assessment fee equal to twenty (20) percent of the company’s gross receipts for each City generated tow or impound with subsequent storage of a vehicle. Exclusive franchise tow agreements have been widely scrutinized in recent months, as evidenced by the highly publicized City of Bell pay scandal. According to media reports and subsequent interviews of Bell police officers, the City’s exclusive franchise agreement led to abusive towing practices by the Police Department. It is alleged that Bell police officers were coerced, and at times threatened with termination, if they did not produce and meet the City’s self-imposed daily vehicle impound quota. Predatory towing practices based on exclusive franchise agreements are not restricted to the city of Bell. In 2005, a regional auto theft taskforce (T.R.A.P), of which we were a part, investigated two tow companies for their unethical behavior. These companies often targeted large apartment buildings, and routinely impounded vehicles without proper authority or permission from property management. Investigators discovered the tow companies were falsifying contracts and extorting money from the registered owners. Several tow company employees were subsequently found guilty and sentenced to state prison. When questioned concerning this illegal practice, the employees admitted to stretching the rules in a misguided attempt to recoup the “upfront money” given to cities with exclusive franchise agreements. At Council direction, we have routinely attempted to support companies that are based and/or maintained within the City. We believe our familiarity and professional relationship with local tow companies have helped to prevent predatory towing practices from occurring. They have continually provided ethical and professional service to Downey’s residents. Accordingly, it is our recommendation that the City continue to limit its contractual tow agreement to United Towing and Titan Transportation. FINANCIAL IMPACT The City received $39,068.92 during the 2010-2011 fiscal year in tow company assessment fees. We anticipate similar revenues for the duration of the agreements. H:\pwb\MYDOCUME\AGENDA\Towing Agreements 2011-6-28-11.doc Attach. RE:pw AGREEMENT This Agreement is made and entered into by and between Titan Transportation, Inc., a California corporation (“Contractor”) and the City of Downey, a municipal corporation (“City”). Contractor and City are sometimes referred to herein individually as “Party” and collectively as “Parties”. The term of this Agreement shall be from July 1, 2011 through June 30, 2014 (“Term”). In consideration of the mutual covenants and conditions set forth herein, the Parties agree as follows: I. SERVICES A. General. Upon request of the Police Department, Contractor shall tow and store vehicles taken into custody by the Police Department, remove debris resulting from accidents, and perform any work that may be necessary preliminary to towing, such as removal of vehicles from ditches, righting upset vehicles or separating entangled vehicles within the city limits of the City of Downey or any place as directed by the Police Department. B. Towing Service. 1. Contractor’s Towing Service Responsibilities. Contractor shall arrive at a designated location within fifteen (15) minutes from receipt of call and provide towing service for vehicles to be taken into custody when such service is requested by the Police Department. Should the Contractor not arrive at the scene within fifteen (15) minutes, the tow request shall automatically be canceled and another vendor will be contacted. The Contractor may be required to provide towing service for vehicles involved in accidents or disabled by other causes, vehicles impounded for evidence, vehicles abandoned in public places or on private property, and for any other reason within the jurisdiction of the Police Department. The Contractor shall have equipment with the capabilities of towing tractor-trailer combinations including those with air brake systems. On accident calls, the Contractor shall clean up and remove all debris resulting from the accident prior to leaving the scene as required by the Police Department. In the event the Contractor receives an additional call to remove a disabled vehicle that is interrupting traffic flow while processing an earlier call, Contractor shall clear the site specified in the prior call sufficiently to restore normal traffic movement and immediately proceed to the site specified by the additional call. Any disabled vehicle deposited or parked by the Contractor at the site specified in any call shall be towed to storage at the earliest opportunity after the Contractor has complied with the above provisions for restoring traffic movement at all specified sites. Contractor shall note if the vehicle to be towed was involved in any damage to City property, such as, but not limited to knock-down of a lighting standard. In such event, an informal, brief written report giving location of accident, nature of damage and identification of vehicle shall be furnished to the Police Department within twenty- four (24) hours. The Contractor shall not remove a vehicle from the scene of the tow without a completed CHP Form 180 prepared by Downey Police Department personnel. The only exception will be exigent circumstances involving threat to life, and upon the direction of Downey Police Department personnel. The Contractor shall take all precautions required by the Downey Police Department to avoid damage to any evidence at the scene of the accident, such as fingerprints or stains. 2. Towing Equipment. The Contractor shall maintain adequate equipment at all times to provide the required prompt towing service as set forth in this Agreement. 3. Hours. The Contractor shall provide twenty-four (24) hour towing service, seven (7) days a week during the term of this Agreement. 4. Rotation. In the event the City of Downey contracts with more than one (1) tow service, the Chief of Police will implement a rotation call system. The rotation system will not be less than weekly nor more than monthly. Weekly tows will begin at 12:01 a.m. Sundays. st Monthly tows will begin on the first (1) day of each calendar month. C. Storage Service. 1. Contractor’s Storage Service Responsibilities. The Contractor shall be responsible for all vehicles stored, together with all accessories and equipment on the vehicle and all personal property in each vehicle. It shall be Contractor’s duty to protect the stored equipment and property against loss or damage by fire, theft or other cause. In the event of loss or damage to a stored vehicle, its accessories or equipment or personal property contained in it, the Contractor shall make restitution to the owner for all losses or damage determined to be the fault of the Contractor. The Contractor shall take all precautions required by the Police Department to avoid damage to any evidence, such as fingerprints or stains. Vehicles taken into custody that involve evidence shall be stored in an area protected against entry by unauthorized persons. Vehicles impounded by the Police Department for investigations shall not be released to the owners without prior approval from the Downey Police Department. 2. Location. Contractor’s storage facility shall be located either within the city limits of the City of Downey or within one-half mile of the City’s boundaries. 3. Storage Facilities. All vehicles taken into custody by the Police Department must be stored in areas that are enclosed by a substantial wire fence or wall enclosures and that have facilities for locking all gates, doors, or other means of access. Such fence or wall enclosures shall be not less than six (6) feet in height and shall be provided with not less than one gate, door, or other means of access of adequate width and height. The bottom edge of the fence or wall enclosure structure shall not be more than two (2) inches above the finished parking surface of the enclosed area. The top edge of the fence or wall enclosure, including all gates, doors, or other means of access shall be equipped with not less than two (2) barbed wires installed in such manner as to discourage access over the top of the fence or wall enclosure. In cases where wire mesh is attached to the roof, the barbed wire will not be required. Wire mesh installation erected inside of building need not be provided with barbed wire. All fence or wall enclosures shall be maintained and repaired throughout the Term of the Agreement. Any damage to such fence or wall enclosures shall be repaired within twenty-four (24) hours to ensure proper protection for the stored vehicles. Storage facilities shall be provided as follows: a. Capacity to store 100 vehicles outside. b. Capacity to store 3 vehicles under sheltering cover, in a manner that offers sufficient protection from the elements. 4. Hours. The Contractor shall provide a service for release of impounded vehicles between the hours of 7:30 a.m. and 7:30 p.m. five (5) days a week as designated by the Chief of Police during the Term of the Agreement. This service shall be provided by making available in person at Contractor’s place of business sufficient personnel for the specified hours. However, when in the opinion of the Chief of Police of the City of Downey, unusual circumstances warrant the release of an impounded vehicle or vehicles between the hours of 7:30 p.m. and 7:30 a.m., the Contractor shall provide personnel at a call station where they may be contacted for such emergency release or releases during such hours. Such after-hour releases shall be charged at 50 percent (50%) of the current tow rate for the release. 5. Receipt of Storage. Upon release of a vehicle, the Contractor shall provide a written release receipt to the person receiving the vehicle. The Contractor shall keep accurate records of all written release receipts. Such records shall be available or made available at all times during regular business hours and shall be subject to audit by the City of Downey or an outside auditing firm contracting with the City. Such audit(s) shall be conducted at the discretion of the Director of Finance, or his or her designee. Failure to comply with this Section 5 shall be cause for termination of the Agreement by the City. All records shall be retained by Contractor for a minimum of five (5) years. II. COMPENSATION A. Rates. The rates Contractor shall charge for towing and storage services shall be in accordance with the fees established by the Los Angeles County Sheriff’s Department. Fees are outlined on the attached “County of Los Angeles Sheriff’s Department Tow and Storage Service Rates” form. In the event the rates are changed, the new rates shall become effective upon written notification by the Contractor to the City. A copy of the rates shall be available for public inspection at Contractor’s place of business during normal business hours. B. Assessment Fee. “Assessment Fee” shall mean the fee or assessment imposed by the City on Contractor solely because of its status as contractor for the storage of vehicles per Section I.C. of this Agreement. Assessment Fee shall not include: 1. Any tax, fee or assessment of general applicability (including any tax, fee, or assessment imposed on both businesses and contractor or their services but not including a tax, fee or assessment which is unduly discriminatory against Contractor or its customers); or 2. Requirements, reimbursements, charges or fees incident to the awarding, enforcing, transfer or renewal of this Agreement, including payments of bonds, consultants, administrative expenses, attorney fees, security funds, letters of credit, insurance, indemnification or penalties. The Assessment Fee shall be equal to twenty (20) percent of the Contractor’s gross receipts for each City generated tow and impound/storage. The Assessment Fee shall be paid to the City monthly and be due the last day of the following month. “Gross receipts”, as used in this Agreement, shall mean all revenues received from towing, impound/storage, and related services, plus incidental receipts of any kind earned by the Contractor as a result of business conducted under this Agreement. All charges shown on invoices and other records are to be explicit in detail, showing the reason for the amount specified. III. ACCOUNTING The Contractor shall keep accurate records of all gross receipts earned as a result of the business conducted under this Agreement. Such records shall be available at all times during regular business hours and shall be subject to audit by the City of Downey or an outside auditing firm contracting with the City. Such audit(s) shall be conducted at the discretion of the Director of Finance or his or her designee. Failure to make available for audit all gross receipts within two business days shall constitute cause for termination of this Agreement by the City. All records shall be retained for a minimum of five (5) years. Each month, Contractor shall furnish to the Police Department, in writing as well as via email, a report of all vehicles that have been towed by the Contractor under the terms of this Agreement, for the previous month period. Such report shall indicate the storage location of each vehicle, and shall include the vehicle make, license number and vehicle identification number. Such report shall also indicate whether a vehicle has been stored for thirty (30) days or more. A reporting under this Sectionshall be due no later than ten days after the end of the previous month period. IV. GENERAL RESPONSIBILITIES OF CONTRACTOR A. Applicable Laws. The Contractor shall keep apprised of, and in compliance with all applicable federal, state, and local law, including the Downey Municipal Code and regulations which are in force or become effective during the Term. The Contractor shall comply with the provisions of the Downey Municipal Code which prohibit parking of commercial vehicles on City streets. B. Change of Location. The Contractor’s business location and storage site existing as of the date of this Agreement shall not be changed without the prior written consent of the Chief of Police. C. Termination of Contract. Should the Contractor default or fail in the performance of any of the provisions of the Agreement and should such default or failure is not corrected within five (5) business days after written notice to the Contractor from the Chief of Police specifying the default and demanding its corrections, then the City may terminate the Agreement. Contractor shall not be held liable if default is caused by inability to obtain fuel. City may terminate this Agreement for any reason on thirty (30) days written notice to Contractor as specified in this Section. D. Indemnification. Contractor agrees to defend, indemnify and hold harmless—with counsel selected by the City—the City of Downey, its officers, officials, employees and volunteers from and against any and all claims, demands, losses, defense costs, or liability of any kind or nature which the City, its officers, agents, employees and volunteers may sustain or incur or which may be imposed upon them, and each of them, for injury to or death of persons, or damage to property arising out of Contractor’s performance under the terms of this Agreement, excepting only liability arising out of or due to the sole negligence of the City.Contractor shall reimburse the City for any and all costs, including reasonable attorney’s fees, which may be incurred. Such indemnification does not apply to claims arising from acts or omissions of other than Contractor’s agents, officers, employees, or subcontractors. E. Insurance. Contractor shall provide and maintain in full force and effect during the Term a policy or policies of insurance with the following minimum coverage: Comprehensive public liability and property damage liability insurance, including broad form contractual liability coverage, with limits of not less than Two Million Dollars ($2,000,000.00) for injuries to or death of any person, Two Million Dollars ($2,000,000.00) for injuries or death arising out of any one occurrence and Five Hundred Thousand Dollars ($500,000.00) for loss or injury to or destruction of any property arising out of any one occurrence, or Two Million Dollars ($2,000,000.00) combined safety liability insurance coverage. Garage Keeper’s legal liability insurance coverage with limits of not less than Six Hundred Thousand Dollars ($600,000.00) for loss or injury to or destruction of any stored vehicles as a result of Fire, Theft, Explosion, Riot and Civil Commotion or Vandalism and Malicious Mischief. Such insurance shall be primary in all instances and shall name the City of Downey as an additional insured. Contractor’s employees shall be covered by Workers’ Compensation Insurance in an amount and form to meet all applicable requirements of the Labor Code of the State of California, and any other insurance requirements that may be required under federal, state, and/or local law. Certificates of Insurance shall be provided to the City of Downey, Department of Finance prior to commencement of the Agreement. The insurance carrier shall provide thirty (30) days advance notice of cancellation or reduction of coverage to the City. Insurance shall be placed with insurers with a current A.M. Best’s rating of no less than A: VII, unless otherwise acceptable to the City. F. Nondiscrimination in Service. Contractor shall comply with all federal, state, and/or local laws with regards to nondiscrimination when rendering service under this Agreement. G. Audit Reports. If an audit pertaining to work performed under this contract is conducted by federal or state auditor or any auditor employed by Contractor, Contractor shall file a copy of such audit with the Director of Finance for the City within ten (10) days unless otherwise provided by contract or regulations. Failure to comply with this requirement shall constitute a material breach of this Agreement, upon which the City may terminate Agreement with ten (10) days written notice. H. Assignment. The Contractor shall not assign or transfer by operation of law any obligation without the prior written consent of the City. I. Entire Agreement. The Parties agree that this Agreement integrates all of the terms and conditions mentioned herein or incidental hereto and supersedes all negotiations, oral, written or otherwise, and all prior writings with respect to the subject matter hereof. This Agreement represents the final understanding and agreement of the Parties with respect to the subject matter set forth herein. J. Independent Contractor. The Contractor is and shall at all times remain as to the City a wholly independent contractor. Neither the City nor any of its officers, employees or agents shall have control over the conduct of the Contractor or any of the Contractor’s officers, employees or agents, except as herein set forth. The Contractor shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. V. TERM OF AGREEMENT The Term of this Agreement shall be from June 30, 2011 through June 30, 2014, unless sooner terminated pursuant to the terms of this Agreement. The Term may be extended for an additional three (3) year period of time (from July 1, 2014 through June 30, 2017), upon written agreement of the Parties. VI. NOTICES Notices pursuant to this Agreement shall be given by United States Mail, postage prepaid, addressed as follows: (a) To City: Rick Esteves Chief of Police P. O. Box 7016 Downey, CA 90241-7016 (b) To Contractor: Omar Camacho, President Titan Transportation, Inc. 8282 Phlox Street Downey, CA 90241 Notice shall be deemed to have been served upon personal service or if deposited in the mail, on the third (3rd) business day after the same has been deposited in the United States Postal Service. This shall be valid and sufficient service of notice for all purposes as set forth in this Agreement. VII. GOVERNING LAW; VENUE This Agreement shall be governed by the laws of the state of California, without regard to conflicts of law principles or rules. Venue shall be proper in Los Angeles County or within the federal district encompassing the County of Los Angeles. VIII. COUNTERPARTS ACCEPTABLE This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed the day and year last written below. Titan Transportation, Inc., CITY OF DOWNEY _______________________ _______________________ Omar Camacho, President Luis H. Marquez, Mayor Date: _________________ Date: __________________ ATTEST: _______________________ City Clerk APPROVED AS TO FORM: ________________________ City Attorney Date: __________________ AGREEMENT This Agreement is made and entered into by and between United Towing Service, Inc., a California corporation (“Contractor”) and the City of Downey, a municipal corporation (“City”). Contractor and City are sometimes referred to herein individually as “Party” and collectively as “Parties”. The term of this Agreement shall be from July 1, 2011 through June 30, 2014 (“Term”). In consideration of the mutual covenants and conditions set forth herein, the Parties agree as follows: I. SERVICES A. General. Upon request of the Police Department, Contractor shall tow and store vehicles taken into custody by the Police Department, remove debris resulting from accidents, and perform any work that may be necessary preliminary to towing, such as removal of vehicles from ditches, righting upset vehicles or separating entangled vehicles within the city limits of the City of Downey or any place as directed by the Police Department. B. Towing Service. 1. Contractor’s Towing Service Responsibilities. Contractor shall arrive at a designated location within fifteen (15) minutes from receipt of call and provide towing service for vehicles to be taken into custody when such service is requested by the Police Department. Should the Contractor not arrive at the scene within fifteen (15) minutes, the tow request shall automatically be canceled and another vendor will be contacted. The Contractor may be required to provide towing service for vehicles involved in accidents or disabled by other causes, vehicles impounded for evidence, vehicles abandoned in public places or on private property, and for any other reason within the jurisdiction of the Police Department. The Contractor shall have equipment with the capabilities of towing tractor-trailer combinations including those with air brake systems. On accident calls, the Contractor shall clean up and remove all debris resulting from the accident prior to leaving the scene as required by the Police Department. In the event the Contractor receives an additional call to remove a disabled vehicle that is interrupting traffic flow while processing an earlier call, Contractor shall clear the site specified in the prior call sufficiently to restore normal traffic movement and immediately proceed to the site specified by the additional call. Any disabled vehicle deposited or parked by the Contractor at the site specified in any call shall be towed to storage at the earliest opportunity after the Contractor has complied with the above provisions for restoring traffic movement at all specified sites. Contractor shall note if the vehicle to be towed was involved in any damage to City property, such as, but not limited to knock-down of a lighting standard. In such event, an informal, brief written report giving location of accident, nature of damage and identification of vehicle shall be furnished to the Police Department within twenty- four (24) hours. The Contractor shall not remove a vehicle from the scene of the tow without a completed CHP Form 180 prepared by Downey Police Department personnel. The only exception will be exigent circumstances involving threat to life, and upon the direction of Downey Police Department personnel. The Contractor shall take all precautions required by the Downey Police Department to avoid damage to any evidence at the scene of the accident, such as fingerprints or stains. 2. Towing Equipment. The Contractor shall maintain adequate equipment at all times to provide the required prompt towing service as set forth in this Agreement. 3. Hours. The Contractor shall provide twenty-four (24) hour towing service, seven (7) days a week during the term of this Agreement. 4. Rotation. In the event the City of Downey contracts with more than one (1) tow service, the Chief of Police will implement a rotation call system. The rotation system will not be less than weekly nor more than monthly. Weekly tows will begin at 12:01 a.m. Sundays. st Monthly tows will begin on the first (1) day of each calendar month. C. Storage Service. 1. Contractor’s Storage Service Responsibilities. The Contractor shall be responsible for all vehicles stored, together with all accessories and equipment on the vehicle and all personal property in each vehicle. It shall be Contractor’s duty to protect the stored equipment and property against loss or damage by fire, theft or other cause. In the event of loss or damage to a stored vehicle, its accessories or equipment or personal property contained in it, the Contractor shall make restitution to the owner for all losses or damage determined to be the fault of the Contractor. The Contractor shall take all precautions required by the Police Department to avoid damage to any evidence, such as fingerprints or stains. Vehicles taken into custody that involve evidence shall be stored in an area protected against entry by unauthorized persons. Vehicles impounded by the Police Department for investigations shall not be released to the owners without prior approval from the Downey Police Department. 2. Location. Contractor’s storage facility shall be located either within the city limits of the City of Downey or within one-half mile of the City’s boundaries. 3. Storage Facilities. All vehicles taken into custody by the Police Department must be stored in areas that are enclosed by a substantial wire fence or wall enclosures and that have facilities for locking all gates, doors, or other means of access. Such fence or wall enclosures shall be not less than six (6) feet in height and shall be provided with not less than one gate, door, or other means of access of adequate width and height. The bottom edge of the fence or wall enclosure structure shall not be more than two (2) inches above the finished parking surface of the enclosed area. The top edge of the fence or wall enclosure, including all gates, doors, or other means of access shall be equipped with not less than two (2) barbed wires installed in such manner as to discourage access over the top of the fence or wall enclosure. In cases where wire mesh is attached to the roof, the barbed wire will not be required. Wire mesh installation erected inside of building need not be provided with barbed wire. All fence or wall enclosures shall be maintained and repaired throughout the Term of the Agreement. Any damage to such fence or wall enclosures shall be repaired within twenty-four (24) hours to ensure proper protection for the stored vehicles. Storage facilities shall be provided as follows: a. Capacity to store 100 vehicles outside. b. Capacity to store 3 vehicles under sheltering cover, in a manner that offers sufficient protection from the elements. 4. Hours. The Contractor shall provide a service for release of impounded vehicles between the hours of 7:30 a.m. and 7:30 p.m. five (5) days a week as designated by the Chief of Police during the Term of the Agreement. This service shall be provided by making available in person at Contractor’s place of business sufficient personnel for the specified hours. However, when in the opinion of the Chief of Police of the City of Downey, unusual circumstances warrant the release of an impounded vehicle or vehicles between the hours of 7:30 p.m. and 7:30 a.m., the Contractor shall provide personnel at a call station where they may be contacted for such emergency release or releases during such hours. Such after-hour releases shall be charged at 50 percent (50%) of the current tow rate for the release. 5. Receipt of Storage. Upon release of a vehicle, the Contractor shall provide a written release receipt to the person receiving the vehicle. The Contractor shall keep accurate records of all written release receipts. Such records shall be available or made available at all times during regular business hours and shall be subject to audit by the City of Downey or an outside auditing firm contracting with the City. Such audit(s) shall be conducted at the discretion of the Director of Finance, or his or her designee. Failure to comply with this Section 5 shall be cause for termination of the Agreement by the City. All records shall be retained by Contractor for a minimum of five (5) years. II. COMPENSATION A. Rates. The rates Contractor shall charge for towing and storage services shall be in accordance with the fees established by the Los Angeles County Sheriff’s Department. Fees are outlined on the attached “County of Los Angeles Sheriff’s Department Tow and Storage Service Rates” form. In the event the rates are changed, the new rates shall become effective upon written notification by the Contractor to the City. A copy of the rates shall be available for public inspection at Contractor’s place of business during normal business hours. B. Assessment Fee. “Assessment Fee” shall mean the fee or assessment imposed by the City on Contractor solely because of its status as contractor for the storage of vehicles per Section I.C. of this Agreement. Assessment Fee shall not include: 1. Any tax, fee or assessment of general applicability (including any tax, fee, or assessment imposed on both businesses and contractor or their services but not including a tax, fee or assessment which is unduly discriminatory against Contractor or its customers); or 2. Requirements, reimbursements, charges or fees incident to the awarding, enforcing, transfer or renewal of this Agreement, including payments of bonds, consultants, administrative expenses, attorney fees, security funds, letters of credit, insurance, indemnification or penalties. The Assessment Fee shall be equal to twenty (20) percent of the Contractor’s gross receipts for each City generated tow and impound/storage. The Assessment Fee shall be paid to the City monthly and be due the last day of the following month. “Gross receipts”, as used in this Agreement, shall mean all revenues received from towing, impound/storage, and related services, plus incidental receipts of any kind earned by the Contractor as a result of business conducted under this Agreement. All charges shown on invoices and other records are to be explicit in detail, showing the reason for the amount specified. III. ACCOUNTING The Contractor shall keep accurate records of all gross receipts earned as a result of the business conducted under this Agreement. Such records shall be available at all times during regular business hours and shall be subject to audit by the City of Downey or an outside auditing firm contracting with the City. Such audit(s) shall be conducted at the discretion of the Director of Finance or his or her designee. Failure to make available for audit all gross receipts within two business days shall constitute cause for termination of this Agreement by the City. All records shall be retained for a minimum of five (5) years. Each month, Contractor shall furnish to the Police Department, in writing as well as via email, a report of all vehicles that have been towed by the Contractor under the terms of this Agreement, for the previous month period. Such report shall indicate the storage location of each vehicle, and shall include the vehicle make, license number and vehicle identification number. Such report shall also indicate whether a vehicle has been stored for thirty (30) days or more. A reporting under this Sectionshall be due no later than ten days after the end of the previous month period. IV. GENERAL RESPONSIBILITIES OF CONTRACTOR A. Applicable Laws. The Contractor shall keep apprised of, and in compliance with all applicable federal, state, and local law, including the Downey Municipal Code and regulations which are in force or become effective during the Term. The Contractor shall comply with the provisions of the Downey Municipal Code which prohibit parking of commercial vehicles on City streets. B. Change of Location. The Contractor’s business location and storage site existing as of the date of this Agreement shall not be changed without the prior written consent of the Chief of Police. C. Termination of Contract. Should the Contractor default or fail in the performance of any of the provisions of the Agreement and should such default or failure is not corrected within five (5) business days after written notice to the Contractor from the Chief of Police specifying the default and demanding its corrections, then the City may terminate the Agreement. Contractor shall not be held liable if default is caused by inability to obtain fuel. City may terminate this Agreement for any reason on thirty (30) days written notice to Contractor as specified in this Section. D. Indemnification. Contractor agrees to defend, indemnify and hold harmless—with counsel selected by the City—the City of Downey, its officers, officials, employees and volunteers from and against any and all claims, demands, losses, defense costs, or liability of any kind or nature which the City, its officers, agents, employees and volunteers may sustain or incur or which may be imposed upon them, and each of them, for injury to or death of persons, or damage to property arising out of Contractor’s performance under the terms of this Agreement, excepting only liability arising out of or due to the sole negligence of the City.Contractor shall reimburse the City for any and all costs, including reasonable attorney’s fees, which may be incurred. Such indemnification does not apply to claims arising from acts or omissions of other than Contractor’s agents, officers, employees, or subcontractors. E. Insurance. Contractor shall provide and maintain in full force and effect during the Term a policy or policies of insurance with the following minimum coverage: Comprehensive public liability and property damage liability insurance, including broad form contractual liability coverage, with limits of not less than Two Million Dollars ($2,000,000.00) for injuries to or death of any person, Two Million Dollars ($2,000,000.00) for injuries or death arising out of any one occurrence and Five Hundred Thousand Dollars ($500,000.00) for loss or injury to or destruction of any property arising out of any one occurrence, or Two Million Dollars ($2,000,000.00) combined safety liability insurance coverage. Garage Keeper’s legal liability insurance coverage with limits of not less than Six Hundred Thousand Dollars ($600,000.00) for loss or injury to or destruction of any stored vehicles as a result of Fire, Theft, Explosion, Riot and Civil Commotion or Vandalism and Malicious Mischief. Such insurance shall be primary in all instances and shall name the City of Downey as an additional insured. Contractor’s employees shall be covered by Workers’ Compensation Insurance in an amount and form to meet all applicable requirements of the Labor Code of the State of California, and any other insurance requirements that may be required under federal, state, and/or local law. Certificates of Insurance shall be provided to the City of Downey, Department of Finance prior to commencement of the Agreement. The insurance carrier shall provide thirty (30) days advance notice of cancellation or reduction of coverage to the City. Insurance shall be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City. F. Nondiscrimination in Service. Contractor shall comply with all federal, state, and/or local laws with regards to nondiscrimination when rendering service under this Agreement. G. Audit Reports. If an audit pertaining to work performed under this contract is conducted by federal or state auditor or any auditor employed by Contractor, Contractor shall file a copy of such audit with the Director of Finance for the City within ten (10) days unless otherwise provided by contract or regulations. Failure to comply with this requirement shall constitute a material breach of this Agreement, upon which the City may terminate Agreement with ten (10) days written notice. H. Assignment. The Contractor shall not assign or transfer by operation of law any obligation without the prior written consent of the City. I. Entire Agreement. The Parties agree that this Agreement integrates all of the terms and conditions mentioned herein or incidental hereto and supersedes all negotiations, oral, written or otherwise, and all prior writings with respect to the subject matter hereof. This Agreement represents the final understanding and agreement of the Parties with respect to the subject matter set forth herein. J. Independent Contractor. The Contractor is and shall at all times remain as to the City a wholly independent contractor. Neither the City nor any of its officers, employees or agents shall have control over the conduct of the Contractor or any of the Contractor’s officers, employees or agents, except as herein set forth. The Contractor shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. V. TERM OF AGREEMENT The Term of this Agreement shall be from June 30, 2011 through June 30, 2014, unless sooner terminated pursuant to the terms of this Agreement. The Term may be extended for an additional three (3) year period of time (from July 1, 2014 through June 30, 2017), upon written agreement of the Parties. VI. NOTICES Notices pursuant to this Agreement shall be given by United States Mail, postage prepaid, addressed as follows: (a) To City: Rick Esteves Chief of Police P. O. Box 7016 Downey, CA 90241-7016 (b) To Contractor: Gene Moore, President United Towing Service, Inc. 11530 Ryerson Downey, CA 90241 Notice shall be deemed to have been served upon personal service or if deposited in the mail, on the third (3rd) business day after the same has been deposited in the United States Postal Service. This shall be valid and sufficient service of notice for all purposes as set forth in this Agreement. VII. GOVERNING LAW; VENUE This Agreement shall be governed by the laws of the state of California, without regard to conflicts of law principles or rules. Venue shall be proper in Los Angeles County or within the federal district encompassing the County of Los Angeles. VIII. COUNTERPARTS ACCEPTABLE This Agreement may be executed in counterparts. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed the day and year last written below. United Towing Service, Inc., CITY OF DOWNEY _______________________ _______________________ Gene Moore, President Luis H. Marquez, Mayor Date: _________________ Date: __________________ ATTEST: _______________________ City Clerk APPROVED AS TO FORM: ________________________ City Attorney Date: __________________