NB towing RFP under fire from industry as possible kickback strategy

A request for proposals related to towing services in North Battleford is coming under fire from the industry, seen by some as a call for “kickbacks.”

The issue stems from the City of North Battleford’s recent request for proposals to supply towing services to the city’s Community Safety Officers and RCMP. Of that RFP, the Roadside Responders Association of Saskatchewan has said it appears cities and municipalities are starting to look towards the towing industry as a revenue stream for their coffers.

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The notice at Sasktenders.ca stated that the RFP was to “solicit companies to supply towing services to the City of North Battleford’s CSO division and its municipal police services provider, the RCMP. The successful Proponent will be the main supplier of towing services to the City and operate a municipal impound within City limits effective Jan. 1st, 2020.”

The RFP opened July 2 and closed at 3 p.m. July 12. The results are likely to come to council in August, however, the News-Optimist has already received phone calls and correspondence from individuals connected to Vista Towing, a local towing company. They have voiced their dismay with the entire process, claiming the city is now unfairly trying to extract money from towing companies. 

The News-Optimist received an email from Marie Houk, who states she is the daughter of Dave and Gayle Washburn, owner/operators of Vista Towing. The email is being circulated to various TV, print and social media outlets across Saskatchewan.

Houk said Vista Towing had been “servicing Battleford/North Battleford and surrounding area for 37 years.”

“Today, after almost four decades of providing 24 hr/day 365 days a year emergency service to the RCMP and the City of North Battleford, Vista Towing being the only company to have never been removed from the rotation by the RCMP detachment due to unsatisfactory service, were told that their response to an RFP in which they were given only 10 days to prepare was incomplete and would not even be considered,” Houk wrote.

She said it’s an issue that has spread from British Columbia across Western Canada, “in an attempt to collect off the backs of the private towing industry a municipal user fee for services provided to the community for protective services.”

Houk’s email said it had been suggested to Vista Towing by City Hall that towing companies should adjust their revenue/ increase rates to allow for a percentage to be paid to the city.

“My question is, isn’t this what municipal taxes are for?” wrote Houk.

Houk said the city had tried an alternate RFP on June 27. In this RFP, she wrote, the city “intended to get into direct competition with the towing industry in North Battleford by operating a North Battleford City storage compound, essentially taking the most profitable service in the towing industry away from the private companies and forcing them to provide the city with a shiny new revenue stream, meanwhile the towing companies would be expected to continue providing the remainder of the emergency services with a significant decrease in net income.”

The RFP was recalled, she stated, when the office of the Minister of Crown Investments’ Corporation, Joe Hargrave, directed SGI Vehicle Impoundment Division to inform the city they would not grant them a garage keeper designation.

A new RFP was then issued July 2, this time with a gross revenue sharing stipulation to be paid in quarterly installments to the City of North Battleford.

Houk noted the City of Prince Albert was another city to take this approach, putting out a similar RFP a couple of years ago. She pointed out Lakeland Towing, a local Prince Albert towing company, was unable to respond to the RFP and the contract went to a towing company from Saskatoon. She noted Steve Brown, North Battleford’s finance director, was the former finance director in Prince Albert.

Houk says the city, mayor and council in North Battleford “picked the towing industry to unilaterally decide they should take a percentage of their gross revenue from, for the privilege of providing a necessary emergency service to the community.” 

“Think about that for a minute, the City, which is policed primarily by the RCMP (not a City police), put out a contract in which the successful proponent has to offer to pay a revenue kickback to the City for allowing that privately owned company, who pay their property taxes, business licenses, SGI licenses and inspections, employee/payroll taxes, and provincial and federal taxes, in order to be awarded a contract for a significant portion of the emergency towing within the City of North Battleford.”     

Other reactions from the towing industry

In addition the News-Optimist received several other items of correspondence including one from the Roadside Responders Association of Saskatchewan, Inc., dated July 9.

In that correspondence the association took aim at Director of Finance Brown.  

“This Director has convinced the City of North Battleford that it is acceptable to basically shake down the towing companies. An RFP was put out on Sasktenders.com. What they did not know was that there would be no new impound lots approved until we, the RRAS, along with the government could figure out what is best for our industry.”

The association further stated that they had met Hargrave in the spring and were assured there would be no more VIP program impound lots approved “until we figured out what was best for the industry. This applies to both urban and rural tow companies.”

Regarding the RFP put out July 2, the association states it “no longer requires the city to be the impound lot or garage keeper, however, the city is now asking for a percentage on all gross revenue sales generated from towing and impounds that originated in the City of North Battleford. They must operate their tow yard on city property. This is reminiscent of an old-time gangster movie, the city requiring a kickback for the right to operate a business in their town doesn’t seem to be a very forthright way of doing business.”

“Is this where we want the towing industry to go? A race to the bottom giving what amounts to as payoffs to cities for the towing rights?“

The News-Optimist was provided the response the association received back from Brown dated July 10. It stated: “Thank you for the email, we look forward to receiving bids from operators in Saskatchewan.”

Also provided to the News-Optimist was correspondence from Warren Frie and Geoff Roller of Astro Towing of Saskatoon. It was dated July 12 and addressed to the Roadside Responders Association of Saskatchewan as well as nine provincial cabinet ministers including Premier Scott Moe.

They also took issue with the RFP, in particular the city’s request that the proponent “shall provide a percentage of all gross revenue generated from all towing and impound business generated from tows within City limits paid to the City of North Battleford in Quarterly installments.”

“In essence what is being asked for is a kickback to direct the tows to the towing company. Not sure if this is legal but if it is legal then it sure seems to us to be unethical.”

Patrick responds

When asked for a response, City Manager Randy Patrick made clear that what the city was seeking was proposals. 

“We sent out an RFP saying ‘we want to go to someone who does this for the city for a period of time. Give us some suggestions on how to do it.’ The RFP is not a tender. It’s how can we best go about doing this.”

Patrick also said that, yes, they wanted funds back, but those funds would be going to protective services and paying for enforcement.

In speaking to the News-Optimist Patrick noted hundreds of cars a year are impounded through CSOs and RCMPs in town. These are the ones impounded in cases of drunk driving or when they have too many parking tickets.

“Every one of those cars that gets pulled over takes time. And why should the taxpayers pay for that if they don’t have to?” Patrick said.

“We’re trying to move the cost to the people who are causing the issue and get some of that rebated back to the city.”

Patrick also made it clear that the opposition by towing companies to the city’s RFP isn’t unanimous.

“Obviously there’s one person who doesn’t like it, but we’re negotiating with another towing company who does seem to care for it,” said Patrick.

The city manager added, “We don’t know if it will work or not, but we’re asking for suggestions for how to do it through this RFP process.”

Patrick also confirmed no final decision has been made on a winning RFP and that it will likely come back to council in August. He further stated “we have no interest in being in the towing business, for the record.”    

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