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1 in 5 city towing bills inflated, invoices show

By Rob Perez

LAST UPDATED: 06:02 a.m. HST, Dec 23, 2012

About 1 in 5 vehicles picked up by the city's exclusive vendor for police-initiated tows were not taken to the company's closest storage lots, inflating the mileage fees charged to the owners, sometimes by more than two or three times, according to a Star-Advertiser review of more than 100 invoices over the past month and a half.

Most of the inflated bills from Leeward Auto Wreckers involved vehicles that were picked up near the company's Pearl City lot but were towed to a Kapolei lot instead, adding an extra eight to 10 miles roughly to the tab, the newspaper found.

At the $7.50-per-mile rate that the company charged until recently, that added an extra $60 to $75 to the bill.

The inflated mileage is the latest revelation by the newspaper showing the various ways the city's new vendor, which had no prior experience overseeing police-initiated tows, boosted charges to motorists beyond what the agreement allows. The company blamed misinterpretations of the contract.

The Star-Advertiser previously reported that Leeward Auto overbilled roughly 2,000 motorists whose cars were towed during the first month and a half under the five-year contract because it charged hookup and mileage fees higher than permitted.

The company said it immediately lowered the fees once it became aware of the problem and promised to refund the overcharges.

Similarly, Leeward Auto indicated that it will offer a "cost adjustment" to motorists who were charged more than they should have been had their vehicles been towed to Pearl City, according to city spokesman Johnny Brannon.

The newspaper also found several invoices in which the vendor charged "difficult tow" fees — ranging from about $10 to more than $70 — for cases in which the hookups were more time-consuming than normal. Yet the city said such fees are not allowed by the contract.

Prompted by the newspaper's findings, the city is demanding that Leeward Auto produce an accounting of all charges for police-initiated tows and a plan showing how the company intends to refund any overcharges and ensure compliance with the contract.

Some Oahu residents believe the city should respond more forcefully to Leeward Auto's overcharging practices and impose sanctions.

"If somebody is abusing taxpayers, the city is obligated to do something," said Lanikai resident Alan Lloyd. "You cannot flaunt contractual terms intentionally and get away with it."

Brannon did not address questions about sanctions.

He said the city did a spot check and found one difficult tow charge on Dec. 16 for $11.62. The city directed Leeward Auto to remove the charge from the invoice.

"We will take similar action regarding any additional charges not specifically authorized by contract," Brannon said in a statement. "The city will continue working with (Leeward Auto) to ensure correct contract interpretation and compliance."

Leeward Auto would not address questions about the mileage issue, the Pearl City lot and difficult tow charges but instead issued a general statement:

"Leeward Auto Wreckers is pleased to be engaged with the city in providing cost-effective towing services. (The company) is cooperating with the city to ensure absolute compliance with its contract and is taking steps to correct recent misinterpretations of the contract. Leeward Auto Wreckers is committed to protecting the integrity of the city's contract."

The city awarded the company the exclusive right to perform all police-initiated tows on Oahu beginning Nov. 1, partly based on Leeward Auto's plan to use five storage lots around the island. One each was in Kapolei, Kalihi, Kailua, Wahiawa and Pearl City, according to city documents.

Vehicle owners benefit when a company has multiple lots spaced around Oahu because the tow truck can go to the closest one, minimizing the mileage fee charged to the car's owner.

But over the first month and a half of the contract, Leeward Auto, unbeknownst to the city, did not use the Pearl City lot, even though it was listed in the company's bid documents as one of the five, according to a company official, Brannon and the contract documents.

That meant cars picked up in the surrounding communities had to be towed to farther lots.

In one example from Dec. 19, Leeward Auto picked up a Lexus about five miles from the Pearl City lot and towed it to Kapolei, charging the owner for a 15-mile tow, not a five-mile one, the invoice shows. The longer distance cost the owner an extra $70, according to the Star-Advertiser review.

The city contract requires Leeward Auto to take vehicles to the closest lots, Brannon said.

By pulling Pearl City out of the loop, Leeward Auto was not complying with the contract, and to fix that, the city is requiring the company to commit to a date for making the lot operational, according to Brannon.

This is the first time the city has turned to one company to handle police-initiated tows for the entire island for vehicle accidents, parking infractions, expired tags and recovered stolen vehicles. Leeward Auto pays the city $60,000 monthly for the exclusive rights.

The city previously divided Oahu into 13 zones and sought competitive bids for each one, resulting in multiple companies getting the business. But the city switched to the new system hoping to gain more efficiencies and better, more consistent service for motorists.

Brian Kunishige, owner of Kuni's Automotive & Towing, which teamed with other companies to submit one of the four unsuccessful bids for the city contract, said lax oversight explains why the city was unaware of the initial contract violations until the newspaper intervened.

"What you have here is (regulators) who just lack the experience and knowledge of the towing industry," Kunishige said. "This is what happens."

Brannon previously told the Star-Advertiser that the city had not received any complaints of alleged overbilling and therefore had not conducted an in-depth audit of the new contract.

In a recent interview, Hans Tandal, Leeward Auto's operations manager, told the newspaper that the contract did not require the company to tow cars to the nearest lot.

That directly contradicted what Brannon subsequently told the newspaper. Tandal did not respond to a phone message asking about the contradiction.

In the earlier interview, Tandal said the company adopted a $165 cap on combined hookup and mileage charges — storage fees are not covered — to ensure that motorists were charged for no more than 12 miles regardless of the distance of the tow.

He also said the company decided not to use the Pearl City lot primarily because of concerns about safety. At night, conditions in the area surrounding the lot are not conducive for women and families picking up their vehicles, Tandal said.

Two secondary factors contributed to the decision, he added.

The company lost a chunk of the leased Pearl City land because of a property infringement issue, and Leeward Auto had concerns about providing adequate security for stored vehicles, according to Tandal.

At the time, he said the company was searching for an alternative site.

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City towing vendor inflated its fees

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LittleEarl_01 wrote:
"The company blamed misinterpretations of the contract." WHOA! Back that tow truck up! 1 in 5? If there had been a misinterpretation of the contract, shouldn't it have been 5 out of 5, NOT 1 out of 5.Thanks to the Star Afvertiser for making the city administration aware of this breach of contract, especially the director of whatever department who makes the BIG bucks.
on December 23,2012 | 03:11AM
mellishi wrote:
...wake up everybody (especially our City), this has been going on for decades! I blame the City and its employed contracts procurement clerk and corp council for not been careful enough and to act in the best interest of the taxpayers - who allow them to have a job! After all, we are the ones paying for their high salaries.
on December 23,2012 | 06:32AM
Wazdat wrote:
AGREE. this is NOTHING NEW, just more INCOMPETENT info from the city.
on December 23,2012 | 11:48AM
Wazdat wrote:
YES, we would not want someone form the city to actually do there job, now would we ???
on December 23,2012 | 11:47AM
awahana wrote:
When you live in a place as expensive as Hawaii, you have to do what you can to survive, some do it legally, by carrying 2 or 3 jobs, some just do it illegally, until they get caught.
on December 23,2012 | 05:25AM
Anonymous wrote:
Shady... The City should have remedies (ie Big Fines) in place when vendors such as these violate terms of the agreement. Sounds like Auto Wreckers knew what was going on but is making excuses to justify their actions when they got caught ripping off the taxpayers and deceiving the city!
on December 23,2012 | 06:22AM
ichiban wrote:
PSSSSST==COMPETITION BREEDS BETTER PRODUCTS AND SERVICES AT A LOWER COST. Basic economics 101. Once again as I said a while ago, government has a lousy business mindset. Government should just do what they were intended to do. Serve the people; enact laws, enforce the laws on the books and be the good shepherd to our way of life. As for the towing company, what's up--are they getting a slap on the wrist, on probation, or terminated with a "GOLDEN PARACHUTE" deal?
on December 23,2012 | 06:38AM
serious wrote:
Agreed, it's also called accountability--but who every accused the city of being accountable?
on December 23,2012 | 10:32AM
bender wrote:
This excsluive island wide contract is not in the best interests of the public as stated ub tge artitcle. When the county was broken into 13 districts, there were 13 storage lots as each contractor was required to maintain a storage lot in the district they were working in. And it's a shame that it takes the StarAdvertiser to uncover the problems, what is wrong with the city administrators. I suspect they put it into overdrive abd started crusing once the contract was completed. Don't know who to blame maore, an inept city administration or a crooked tow operator.
on December 23,2012 | 06:56AM
cojef wrote:
The $65,000 franchise fees that Leeward pays to the City, can go long way into hiring a permanent audit specialist for this activity. The Federal Government charges reimbursable fees for clearing cargo outside of official hours. Why not the City for this activity as it is subject to abuses. Only in this manner can the general public be assured that they are not being overcharged.
on December 23,2012 | 10:48AM
Wazdat wrote:
Blames the INEPT and INCOMPETENT city. What a JOKE. I bet you would find this type of over billing in just about EVERY city and state office.
on December 23,2012 | 11:49AM
localguy wrote:
Responsibility for all city employees who fail in their job falls directly on the Mayor. Mayor is personally responsible for ensuring all employees do their job. No wonder we are getting a new Mayor, one babooze after another.
on December 23,2012 | 01:18PM
Kalaheo1 wrote:
Ordinarily, I'd be ecstatic that our local paper is finally doing some investigative reporting. Unfortunately, since the merger, they have supported all things "status quo" and their reporting and endorsements have served the local political machine.

I can't help wonder if this story is less about a tow company taking advantage of their contract and more about trying to get one of the other companies their contract back.
on December 23,2012 | 07:30AM
Wazdat wrote:
AGREE. this paper has lost what it used to be about. THE PEOPLE
on December 23,2012 | 11:50AM
eastside808 wrote:
Good job Rob. What dept is responsible for ensuring proper prosecution of this contract? The article should also identify the city and County agency as well. If the agency or dept is not enforcing this contract then what other contracts are they currently overseeing and will we see similar incidents of non-compliance by the companies that have contracts with the city.
on December 23,2012 | 07:57AM
Maneki_Neko wrote:
It's the Department of Towing. 52 full time employees making $85,000 a year. They are currently striking for more pay and better retirement benefits. The key positions are all appointed, of course. They make a lot more from the skim. In other words, business as usual.
on December 23,2012 | 08:38AM
Wazdat wrote:
WOW, talk about INCOMPETENT.... They fit perfect in this city
on December 23,2012 | 11:51AM
Maneki_Neko wrote:
Please tell me you realize that was satire. Please.
on December 23,2012 | 11:54AM
st1d wrote:
rico: extortion and racketeering.
on December 23,2012 | 08:00AM
coldtoo wrote:
ClassAction city/tow co.
on December 23,2012 | 09:00AM
islandsun wrote:
The city is inept.
on December 23,2012 | 09:36AM
localguy wrote:
This is not news. This is what clueless, unprofessional contractors with no, zero, integrity do in the Nei. They smile, shake you hand, agree to everything, then cross their fingers behind their back. Knowing full well our clueless elected bureaucrats will not have the intelligence to see what they are doing. No wonder tourists come to see the living example of dysfunctional South Park in the Pacific. I wonder which elected bureaucrats received contributions from this contractor to look the other way.
on December 23,2012 | 09:54AM
pamelamb wrote:
this is what happens when the City has the illogical policy of awarding contracts to the lowest bidder. In order to not go with the lowest bidder, there is a lot of paperwork and hoops one must jump through in order to prove what everyone else can see.
on December 23,2012 | 10:30AM
zhawaii wrote:
The moral of the story, don't park illegally. After all, the ones getting ripped off are the ones breaking the law.
on December 23,2012 | 10:47AM
tobyclairmont wrote:
Get serious.
on December 23,2012 | 12:13PM
tobyclairmont wrote:
These towing companies must be run by Tony Soprano and his colleagues. There is absolutely no integrity and they prey on people. First they take your car to a remote, dark location. Then they inflate the fees adding all kinds of additional fees. Then they demand cash - even in the middle of the night. This is at best, a criminal enterprise. Time for action.
on December 23,2012 | 12:08PM
localguy wrote:
Sad to say city spokesman Johnny Brannon is tired of being the fall guy for all the sorry bureaucrats and contractors involved in this willful fiasco. City failed to check how the contractor was doing, no check plan in place, just sitting back and collecting money, thinking all was well in the Nei. No fine schedule in place to ensure contractor does not cheat. Hans Tandal, Leeward Auto's operations manager and his other company tow contractors lack any integrity, trying to spin the whole fiasco they created as "misinterpretation of the contract" You knew exactly what you were doing, do not try to lie your way out of it. Well, this is typical when you are a product of the Nei's schools, lack reading skills, lack of English comprehension, can't understand unless there are pictures. Hello, you signed the contract, if you didn't understand it you should have asked questions. Now trying to spin your way out of it you look even more backwards than you are.
on December 23,2012 | 01:16PM
alohacharlie wrote:
Does anyone think that anyone in authority or elected official will do anything about this? Business as usual here in Hawaii.
on December 23,2012 | 01:43PM
GooglyMoogly wrote:
Kudos to the Star-Advertiser. THIS is what newspapers need to do to stay relevant. Don't just rehash the AP's feed...dig through the details and investigate. Fantastic piece!
on December 23,2012 | 02:52PM
aloha12 wrote:
These greedy bast ds should have their contract trashed by the city!! They broke the agreement with pure GREED and extortion PLAIN AND SIMPLE.....they broke the contract and therefore they should lose the contract....wake up city officials!!
on December 23,2012 | 04:21PM
mongoosa wrote:
Deja Vu......remember the article (or maybe newscast) on the city contract with the Medical Examiner to pick up the dead bodies? The contract went to a convicted felon.......no background checks for contract hires. No wonder there are so many crooks from the top to the bottom. These people have access to citizens's personal property......not saying they would think of that.....
on December 23,2012 | 07:34PM
hikine wrote:
The company said it immediately lowered the fees once it became aware of the problem and promised to refund the overcharges. Translation: We got caught red handed! Refund the monies but no time frame!
on December 23,2012 | 08:11PM
Anonymous wrote:
Sounds like the City should break this contract now, before it gets dragged into court for violations by the contracted towing company! Too many simple errors are showing up, mis-communications and misinterpretations of the contract with in the first few months since the contract was initialized is not a good sign, nor does it engender any feelings of safety and security by those who have had their cars towed by Leeward Auto wreckers Towing; ah heck, Carlisle don't care, he's out of office come the new year anyway!
on December 23,2012 | 08:12PM
hikine wrote:
BTW, who's getting the kickback? Which department oversees these contracts to make sure the public isn't being shafted?
on December 23,2012 | 08:14PM
ragnar wrote:
This is a story about a newspaper.
on December 23,2012 | 10:11PM
oahuresident wrote:
The company will also not release the vehicle to anyone except the registered owner. My wife's car was towed and they would not release it to her because my name was on the registration. I had to make the trip to their lot from work. I asked them what if I was on a mainland business trip. They said they would not be able to release the car and storage charges would apply.
on January 21,2013 | 12:53PM
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