City officials call for review of towing program

Handful of companies have lock on lucrative business

February 26, 2011|By Julie Scharper, The Baltimore Sun

Baltimore's police commissioner is demanding a review of the decades-old practice of funneling the city's multimillion-dollar towing business to a small circle of companies without requiring them to compete for contracts.

Other city officials, including Mayor Stephanie Rawlings-Blake, are also calling for a closer look at the towing system — just days before the contract was scheduled for a two-year renewal.

A federal probe that netted 30 Baltimore police officers in an alleged kickback scheme involving an uncertified tow company has also triggered scrutiny of the city's $4 million towing business. While the 10 city-certified companies were not implicated in the investigation, the case has shone a spotlight on the arcane and poorly documented process of awarding the lucrative contract.

The companies — known as "medallions" for the police-issued stickers affixed to their trucks — have had a lock on the city's towing business for at least three decades, elbowing out competitors by expanding their fleets to cover more territory. One of the companies forfeited its state business certification two years ago but continued to operate under its exclusive city contract.

Police Commissioner Frederick H. Bealefeld III refused last week to sign a contract that would have renewed the 10 companies' agreement with the city for two years. Bealefeld wants to review the process first, a spokesman said. "We need to get our house in order and figure out what's going on," said spokesman Anthony Guglielmi. "From what we can gather, it's a pretty old system that could probably use some updating."

Rawlings-Blake is seeking a "comprehensive review" of the towing system, which is administered jointly by the city's Department of Transportation and the police, according to a spokesman.

And Councilman James B. Kraft said he plans to convene a hearing on the towing program before the Judicial and Legislative Investigative Committee, which he chairs. "Given the nature of these actions, and given concerns that have been raised before, I think it's worth us taking a closer look at the whole process," Kraft said.

City officials were unable to explain the system by which the 10 companies have been awarded the contract — or why the process of obtaining a medallion is not competitive. But officials say the medallion arrangement benefits the city by guaranteeing quick response and safe service for vehicles that have been disabled in an accident or are illegally parked.

The medallion tow companies pay an annual fee of about $500, with an added charge of $100 per tow truck. The city receives a fraction of the money that the medallion towers bring in. Companies charge $130 to $140 per tow for the Police Department; the city receives $7.50 of that under a deal approved in 2009. Before that, the city did not receive any of the towing fee.

If a vehicle owner asks for a tow anywhere other than the city's impound lot, the medallion tow companies can charge $300 or more, according to their contract with the city. By comparison, the Department of General Services has a contract with Auto Barn — also a medallion tower — to haul city vehicles for $60 each.

Owners of other towing companies say the city's medallion program grants an unfair advantage to a tight-knit group.

"There is no way anybody could possibly get a foot in the door," said Robert DeShazo, who has been repeatedly refused a medallion for his company, Pulaski Towing. "We have a dictatorship going on in the city. There's one small group of people who has everything, and everyone else is dirt poor."

Greg Norman, owner of Premier Towing in Woodlawn, said he has tried periodically to apply to become a medallion company but has been told the city is not accepting new ones. "All we're saying is, give everyone else an opportunity," he said.

Sonny Appolonia, who owns Baltimore Towing Co. in North Point, said he has been denied repeatedly. "The medallions have it locked up so tight that no one else can even get in," he said. "These guys get larger and larger, and they don't let anyone in."

Paula Protani, leader of an association of medallion towers, called the other companies "sore losers."

"Everyone thinks we're the fat cats, money is just thrown at us … and that's not necessarily true," she said. "The system will only allow for so many people. The people who are in there, we're doing our jobs properly and sufficiently to maintain our contracts."

Protani is a manager at Frankford Towing, which is owned by Dick Bonnett. He and his family members own two other medallion tow companies, Mel's Towing and Ted's Towing, she said.

The medallion towers are required to maintain high levels of insurance, pass employee background checks, be bonded and arrive within 20 minutes of being called. But city officials were unable to say last week how the companies were held to these standards.

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