City Council begins review of medallion towing system

Baltimore lawmakers agreed Wednesday night that the way the city handles contracts with a handful of towing companies needs to be reformed, and they want an outside consultant to study the issue.

Officials are seeking to review an arcane system known as "medallion" towing, in which many of the 10 certified companies have been virtually locked into their contracts for the past three decades. Some kept their contracts despite having problems that led to the state decertifying their businesses.

Councilman James B. Kraft said that the legislative oversight hearing was called "to see how the system can be improved" to unify the towing process, which is a shared responsibility of the Department of Transportation and police.

The towing issue attracted attention after federal authorities arrested 17 city police officers in February and charged them with getting kickbacks for steering drivers involved in accidents to a Rosedale towing company and car repair shop that was not on the city's list of certified companies.

In February, Baltimore Police Commissioner Frederick H. Bealefeld III and the mayor demanded a review of the entire practice, in which the small number of towing companies are dispatched to tow vehicles that are disabled or involved in accidents.

Though so-called medallion companies were not implicated in the alleged scheme, the embarrassing spectacle and implications of police corruption prompted a review of the way in which cars are towed by the city and who gets the money.

The idea behind awarding medallions is to ensure that people across the city pay the same amount for having their vehicles towed — $130 to $140. Critics, many from towing companies who felt locked out of the system, have called the procedures a virtual "dictatorship" that eliminates competition.

During the informational hearing, Councilman Bill Henry asked how a company wins a medallion. When no one was able to directly respond, he said there should be "some method of ensuring an open and transparent process" for companies to become medallion companies.

Councilwoman Mary Pat Clarke questioned how well-versed officers are in the towing process, to which the police commissioner responded that they know.

"We have a general order, a policy" the officers learn in the academy, Bealefeld said. "They know what they are doing," he said.

Officers are supposed to consult the vehicles' owners to see if they want the officer to make arrangements to have their vehicles towed or if they prefer to handle it themselves. If officers are asked to call, Bealefeld said, they call dispatchers, who contact a medallion company.

The medallion companies have the sole right to tow cars that are blocking the flow of traffic after a crash.

Department of Transportation Director Khalil A. Zaied gave a presentation in which his department suggested the city hire a consultant to provide recommendations to reform the system, with a final solution to be given in the fall.

The council did not take any action Wednesday, but the department will begin interviewing consultants May 2.

The department also advised against a proposal that would use the outside company, AutoReturn, to manage towing in the city. The company operates in Baltimore County.

"They make good money," said Councilman Robert Curran of AutoReturn, which operates in municipalities around the country. Curran said the costs from the company would be passed on to those who get their vehicles towed.

After the presentation, Paula Protani, leader of an association of medallion towers, told the council that the firm involved in the February scandal "was not a tow company. It was a body shop. Medallion tow companies are not the problem."

Outside the hearing, Curran said the medallion system is not the problem but said it could be more efficient.

In the case involving the city officers, the medallion companies lost business. City police are alleged to have convinced car owners who needed tows to use a company called Majestic, which would waive the towing fee and handle insurance claims. In return, prosecutors say, the officers got up to $300 for each car referred to the company.

Charges against the 17 officers and the owner and an employee of Majestic are pending.

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