In a special session, the Detroit City Council approved $1.3 million in contracts with seven local towing companies that had been operating illegally since 2021.

Each company was unanimously awarded a five-year $187,500 contract during a Monday session of the council, which is normally on holiday recess until January. After a 2021 legal change, council now has oversight of city towing contracts. Corporation Counsel Conrad Mallett said towing companies working on behalf of the Detroit Police Department were being paid through now-defunct permits issued by the Board of Police Commissioners, a civilian body that was once responsible for selecting towers. 

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Julie Semma, owner of 7-D’s Towing, said a Detroit police captain who oversees the department’s towing operations informed towing companies last week that they were operating without permits. “Swift action” had to be taken, Mallett said, to secure proper contracts so towing services would not be interrupted. Police-authorized towers are responsible for impounding vehicles that are stolen, disabled and abandoned on private property, among other unlawful reasons.

“We had to figure out a way to come before this body and ask again for approval of necessary contracts that were in fact competitively bid, or the mayor would have to consider declaring an emergency,” Mallett said. “This session of the Detroit City Council gives us an opportunity to properly contract for critical services in an appropriate manner based on an open and competitive bid process.”

Mallett said his office can’t allow towing invoices to be paid unless they’re based on contracts approved either by the Detroit City Council or by Mayor Mike Duggan through his emergency powers, which the mayor exercised last week to secure contracts with paratransit vendors. 

Towing companies had been working without contracts since September 2021, according to the Detroit Towing Association, after city officials implemented a new system requiring companies to be selected through a competitive bidding process with the Office of Contracting and Procurement instead of permits issued by the police board. The switch was partly in response to a federal investigation of corruption in the towing industry that implicated two former City Council members and several police officers. 

Contracts approved Monday with Detroit-based companies are effective immediately and expire July 31, 2027. They include BBK Towing & Recovery, Inc.; 7-D’s Towing & Storage; Wayne’s Service, Inc.; Troy’s Towing, Inc.; ABA Impound, Inc.; H&B Land Towing, Inc.; and Bobby’s T.C.B. Towing Service.

Council member Gabriela Santiago-Romero, who represents District 6 on Detroit’s southwest side, said approval of the contracts were delayed so elected officials could look into complaints against some of the companies that bid on them. The council had previously agreed to discuss the contracts in early January. 

Peggy Goodwin, a representative of the Detroit Towing Association, said having seven towers leaves the police rotation down from 11 companies that had been performing the work in the past. Chief Procurement Officer Sandra Stahl said 15 bidders submitted responses to the contract request. A contract with an eighth company, Goch & Sons Towing, Inc. was held after residents raised concerns about price gouging and predatory practices that were denied by the company. 

DTA President Barry Foster, also the owner of L.I.J.B.S. Enterprises, LLC, said in a statement that fewer qualified towers could affect response times. Foster also told the council in person Monday that he felt the contracts were being rushed. 

A November hearing was held to consider a protest petition filed by L.I.J.B.S. after it was denied a police towing contract. L.I.J.B.S. was among seven companies that were rejected due to concerns about whether the city could trust the towing vendor, though City Council recommended DPD and the Office of Contracting and Procurement to reevaluate the bid after the hearing. 

Foster said he learned over the weekend that his company was rejected again, and alleged “there is zero transparency as the city scoring process for this bid.” However, Mallett said the company’s bid was rejected after a “careful and thorough reevaluation.”

“We conveniently received this new correspondence over the weekend, two days before this session that was set, despite the (council’s) decision to delay action on towing contracts that the (contracting) department cherry-picked,” Foster said. “I’m in talks with my attorney to consider our next steps, but in the meantime I humbly ask this body to ask the necessary questions of the administration and OCP.”

Jerome Warfield, a former member of the Board of Police Commissioners, raised concerns about the bidding process during the Nov. 17 hearing. Warfield said not enough time was given for companies to apply. He again asked the council to approve the L.I.J.B.S. bid on Monday. 

Goodwin also advocated for a rate increase before the City Council on Monday, arguing that towing companies have been paid the same since 2013. 

Anyone who has a dispute about a towing charge can file a petition with the 36th District Court within 20 days of the vehicle being towed. Motorists who want to complain about towing prices can also contact the Attorney General’s Consumer Protection Division at (517) 335-7599.