POSTED: 01:30 a.m. HST, Dec 14, 2010
Motorists are naturally dismayed to find their vehicles have been towed away because of parking violations, accidents or other reasons -- but they have a right to be angry about overcharges by the towing company. The city should stop renewing its monthly contract with the company that provides that service from downtown to Makapuu, tighten oversight and require all future towing operators to follow the rules.
Under the administration of Mufi Hannemann, the city was fully aware of the problems with towing contractor Stoneridge Recoveries, and it won a court battle against it that lasted more than seven years to allow rebidding the contract.
That was last May, but still, Stoneridge continues to be the sole police-initiated towing company for the city in the busiest district in urban Honolulu.
Assisting the state's insurance fraud unit in its criminal investigation of Stoneridge, the nonprofit National Insurance Crime Bureau reviewed about 500 accident tows from 2009 to early this year and found that all but one included so-called difficult accident hookup fees, people familiar with the overcharging probe told the Star-Advertiser's Rob Perez.
A difficult hookup adds a fee per each 15-minute increment beyond the initial quarter-hour to hook a vehicle to the company's truck: $14 per increment during the day or $21 per increment at night.
Other towing companies on Oahu say most hookups take only 15 minutes. Oahu Auto Service, which preceded Stoneridge as the city's contractor in this urban district, charged difficult fees for no more than a fourth of its accident tows, said its owner Brian Kunishige.
Four years ago, then-Police Chief Boisse Correa urged Hannemann to terminate the contract with Stoneridge because "this pattern of unprofessional conduct, accusations, questionable business practices and proposals by Stoneridge jeopardizes the integrity" of the city.
One insurance carrier that reviewed Stoneridge invoices and police records found that the company consistently charged for time that went beyond what police recorded for the time that accident scenes were cleared.
City Councilwoman Ann Kobayashi, whose district is in the Stoneridge tow zone, says she hopes the administration of new Mayor Peter Carlisle will make changes. We agree that is overdue and needs to happen in the interest of the taxpaying public.
The Carlisle administration seems ready to proceed and says it intends "to solicit new bids for towing contracts that protect the public, are fair to the towing companies and are in the best interests of the city."
It also needs to step up vigilance to ensure that contract terms are stringent and not being abused.
Stoneridge and the city now are close to resolving a dispute over what the city says is $360,000 owed by the company and what Stoneridge claims the city owes the company for unpaid tows.
That resolution should not contractually bind the city to Stoneridge for further police-initiated towing.