Detroit’s sneaky plot to take over towing puts taxpayers at risk

The Detroit Police Department misled elected officials and the public, violated city ordinances and placed taxpayers at risk when it hastily entered the towing business last month.

Since then, the police department has botched towing jobs and failed to safeguard its four impound lots. Private towing companies are beginning to sue the city, and police are being taken off the streets to handle towing-related staffing.

“This whole thing stinks and is as dirty as Flint’s water,” Police Commissioner Willie Burton told Motor City Muckraker on Tuesday. “The chair of the commission has been meeting with the mayor and police chief and not reporting back to the commission.”

Police Commissioner Willie Burton

Burton said he learned the city was getting into the towing business a day before the meeting in which the commissioners were expected to approve the move last month. Burton was one of two commissioners to reject the proposal, but seven others supported it without any information.

“Nothing was presented to the board,” Burton said. “We didn’t have time to do our due diligence. What is this costing the city? We cannot be rubber stamps.”

The police department, under the leadership of Chief James Craig, spent $575,000 on six tow trucks without seeking approval from the Board of Police Commissioners. Industry sources say the trucks, some of which were foreign built, cost the city nearly twice what they are worth.

The City Council also was left in the dark and accused police officials and Mayor Duggan’s administration of secretly plotting to take over towing operations for reasons that remain unclear.

“I wasn’t briefed or informed of the decision made by the Detroit Police Department,” Sheffield told Motor City Muckraker.

Duggan’s administration and its attorneys are meeting with council members behind closed doors at 2:30 p.m. Wednesday to discuss “pending tow litigation.”

The Police Department declined to answer any questions for this report, depriving the public of its right to know why the city would enter the towing business when it can’t sufficiently provide police protection to the neighborhoods.

Detroit Police Chief James Craig

Craig and other police officials maintain the move was urgent because a new state law would prevent cities from getting into the towing business unless they did so by Oct. 1.

But that explanation is insincere, at best. State House Rep. Peter Lucido introduced the new law in February – more than seven months before it went into effect. The city’s own lobbyist, GCSI, was pushing for the bill’s approval.

Craig also told the local media that he had talked for months about the issue with Board of Police Commissioners Willie Bell, who was endorsed by Duggan. But Bell claims he didn’t know the city was getting into the towing business until after police purchased the trucks and needed urgent approval.

The move also has raised eyebrows because most cities have privatized their towing services because they’re costly and place taxpayers at risk.

One of the most violent and cash-strapped cities in the nation, the city doesn’t have the resources to provide adequate police protection. By getting into the towing business, the city is at risk of losing money it doesn’t have.

Not only does the city have to buy the trucks and pay employees to operate them, it also has to provide staffing and spend millions of dollars to bring the impound lots into compliance.

Motor City Muckraker surveyed the city’s four lots and found that all of them are violating city ordinances. None of them had the required fencing, gates, security systems or impermeable surfaces that are mandated. In fact, one of the lots on Grand River was monitored by a police car.

“Towing companies must provide convenient, well-managed, and courteously operated storage facilities for vehicles toward pursuant to Detroit Traffic Codes,” the city ordinance states. “The tow company shall maintain an office at each facility with sufficient space for all necessary business capabilities, i.e. computers with software capabilities to collect vehicle information and other data, telephones, facsimile machines for servicing the customer and the Department.”

The ordinance also requires tow companies to “supply necessary toilet facilities at each location. The company shall be responsible for securing the facilities, all vehicles located therein for the safety and security of all towed vehicles.”

None of the lots came close to complying with the city’s ordinance and all of them violate zoning laws.

In addition, the city’s trucks were spotted without the required Department of Transportation numbers, and drivers lacked mandated reflective clothing and certification.

Soon after the city said it would take over up to 50% of the towing, Detroit Auto Recovery sued the city for violating its own ordinances and rules governing towing.

“The city is operating two illegal enterprises: a towing company whose trucks fail to comply with state law; and multiple impound facilities that violate the Zoning Ordinance,” the lawsuit states.

In addition, the self-insured city is putting taxpayers at risk because of the liabilities that come with towing, such as theft and damage to the vehicles.

One video shows new towing employees struggling for nearly two hours to flip over a car on its side.

The city also exposed itself to costly lawsuits, and more companies are expected to sue.

In August, U.S. District Court Judge Linda Parker ruled in a lawsuit filed by Nationwide Recovery, a Detroit towing company, that towers have a right to sue the city over the inequitable distribution of tows. For reasons that remain unclear, the city suspended the licenses of tow companies in August 2017 – a decision that could cost taxpayers millions of dollars in litigation costs and judgments.

Parker said a towing permit “could not be revoked without due process of law.” The judge added adding that it’s “unconstitutional” to deprive a tow company of “a hearing either before or after its permit was suspended and ultimately revoked.”

Private towing companies also argue that the city, under its own ordinance, cannot take over operations and instead must become a part of the regular rotation of towers.

What does this all mean? The understaffed police department is at risk of losing money it doesn’t have. Residents often have to wait an hour or more for police to respond to an emergency.

The response times may get worse as the city loses money taking on towing and fighting lawsuits.

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Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.