As part of a three-year revenue-sharing contract with the city that was finalized in October 2000, North Shore must fork over to Evanston a portion of its revenue for each tow it makes on behalf of the city.
And Evanston is now reaping the first benefits of a smoothly handled bidding process and contract negotiation. In January the city received a check for about $17,000 from North Shore for the last three months of tows.
The city expects to collect between $50,000 and $75,000 of North Shore’s money in the contract’s first year – money that the towing company had been allowed to keep under the original contract signed in 1996.
Evanston’s purchasing manager, Chad Walton, said the contract was designed to recoup the city’s costs of coordinating operations with the towing company. Although the contract is not a city “revenue-maker,” he said, it is a revenue-drainer for the towing company.
“They didn’t come out and express outright displeasure (with the contract),” said Walton, a key participant in negotiating the new contract. “I don’t think they were happy. As any businessman would, they would rather keep all the money.”
Robert Cole, president of North Shore, declined to comment on the contract, which he signed Oct. 20. He also declined to comment on the number of cars the company annually tows in Evanston.
The 1996 contract allowed North Shore to “retain all the revenue received from private citizens … even though a considerable amount of city staff time is spent during each (tow),” according to a memo drafted by Walton and Evanston’s Finance Director William Stafford.
The new contract also increased towing fees for citizens to $110 from $85. The city now receives $15 per vehicle towed. But if the number of towed and redeemed cars exceeds 4,700 in any given year, the city would get $20 for every car.
Under the 1996 contract, North Shore also gave the Evanston Police Department $25 for each abandoned car that was scrapped, regardless of the market price for scrap metal.
Under the new contract, North Shore must give the city $30 for each abandoned car that is scrapped, but only when the market price for scrap metal exceeds $50 per ton. So far, the city has not received any money from abandoned cars.
Walton estimated that EPD would have received almost $4,000 in the last three months from abandoned cars. The city will give an equivalent amount of money to EPD to compensate for the loss, Walton said.
The city, in its request for the new proposal, asked for a revenue-sharing component to allow the city to “recover some of the costs it incurs as a result of coordinating operations” with North Shore, according to the memo, which was distributed to Evanston City Council on Sept. 6. “The city staff incurs costs during the towing of vehicles during street cleaning, snow emergencies, traffic accidents, etc.”
According to the memo, the city originally considered two proposals – one from North Shore and one from Lincoln Towing of Chicago.
Lincoln’s proposal stated it would lease a facility at Kedzie Street and McCormick Boulevard, Walton said. But between the submission of the proposal and the September meeting, Lincoln’s targeted facility became unavailable, according to the memo.
The loss of the facility hurt Lincoln’s chances for contracting with the city, Walton said. But “if Lincoln could have come up with something else, we would have listened,” Walton said.
And Lincoln’s guaranteed response time of 45 minutes was “too excessive to merit serious consideration,” according to the memo.
Walton said the city did not reveal to North Shore that Lincoln’s facility had fallen through, so North Shore did not know it was the only bidder worthy of the contract.
“In a negotiation, you don’t show everybody your aces,” Walton said.
In the memo, Walton and Stafford recommended the city approve a three-year contract with North Shore. “They were happy to get the contract again,” Walton said.
