Audit Report No.

01 December 31, 2016

Oregon State Police

OSP

OREGON
STATE
POLICE

AUDIT
REPORT

Tow Program Audit

Robert G. Miller, CIA, CGAP

PURPOSE:
The objectives of the audit were to:
1.
2.
3.

Evaluate effectiveness of tow program and make recommendations for improvement

Benchmark OSPs tow program with other law enforcement tow programs
Research OSPs ability to have more authority to regulate towers, including the capping of tower fees

RESULTS IN BRIEF:
OSP does not have sufficient staffing, technology, and policy to operate a tow program able to meet even limited oversight
over its Non-preference Tow program. The existing CAD system lacks a consistent collection of accountability data and
systems for disseminating it to those with oversight responsibility. There is no tow training program within OSP clarifying at a
program level what the existing law, rule, policies, and practices are meant to accomplish.

INTERNAL AUDIT RECOMMENDS OSP:

1.
2.
3.
4.
5.

Define clear operational goals as to what the Non-preference Tow program is meant to accomplish
Define realistic staffing levels needed to support operational goals
Define program training needed of all staff supporting operational goals
Define supporting operational data collection needs (what & why) and systems delivery needs (how)
Create and update rules & policy that support program operational goals

OSP MANAGEMENT RESPONSE:

Management agrees with audit recommendations.
INTRODUCTION AND BACKGROUND
The stated purpose of the Oregon State Police Tow Program is to meet the operational needs of the Department by initiating
impartial prompt and orderly removal of disabled, abandoned or, hazard vehicles, and vehicles involved in accidents from
Oregons highways.
The two separate programs that exist within the tow program are the Non-preference Tow program, and the 780 tow program
(vehicle impoundment). The departments authority for governing the Non-preference Tow program is rooted in ORS
181A.350, which allows the Superintendent of State Police rulemaking authority governing the eligibility of towing businesses
to be placed and remain on any list used by the Department. OSPs current towing service rules governing the program are
publicized within OAR 257-050-0020 through 257-050-0200. The Non-preference Tow program consists of a non-preference
computer generated listing of approximately 300 prequalified tow businesses that may be called upon to conduct vehicle tows
at the operational need of OSP that include the 780 Tow program.
The 780 Tow program is an OSP ordered impoundment of vehicles governed by ORS 133.033 Community Caretaking
standards. The 780 Tow program is the only OSP initiated tows that charge the public an administrative fee. Both programs
may include hearing requests from the public disputing the legitimacy of the tow, as well as disciplinary action taken involving
tow companies under the Non-preference Tow program.

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The staffing to support OSPs tow program consists of a single Lieutenant serving as the program manager who oversees the
tow program as well as other assigned programs. Reporting to the program manager from the professional side of OSP is a tow
program coordinator whose job description allocates .55 of an FTE to the tow program. Between the two positions, the
coordinator position has historically been more stable in that the current coordinator has been in the position for approximately
12 years, whereas the program manager position has had various personnel rotate in and out of the program within the same
time period. The coordinator in consultation with their manager is tasked with directing both programs by overseeing and
coordinating with OSP law enforcement and professional staff throughout the state.

AUDIT RESULTS
OSP Goals as administered through OSP Policy and Administrative Rules
As an auditor, I struggled to define what the stated goals of the program meant in the way of operations. The existing rules give
the appearance that OSP exerts control over towers through its application/inspection, and suspension/revocation process
within the Non-Preference Tow program. Although a closer look into the program showed little evidence that real oversight of
towers happens in any meaningful and consistent manner. This is not the fault of any one individual; its just that the way the
tow program is staffed and set up makes it all but impossible to do adequate oversight of the approximate 300 tow companies
statewide.
The current Non-preference Tow program realistically evolves around signing up towers via a weak application/inspection
process that then relies on towers to mostly self-regulate, and only reacts to towing issues as they surface. The Non-preference
Tow program appears to emphasize fairness to individual towers by assuring equal access to OSP initiated tows but does
nothing to emphasize fairness of towers in their dealings with the public. OSP should be candid about what the goals of the
Non-preference Tow program really are. If the goals are to exert actual control over towers through an application/inspection
and suspension/revocation process that would regulate the towers in an effective way, then the staffing, systems, training, and
rules/policy of the program are entirely inadequate.
Application/Inspection of Non-Preferential Tow Program
Applying to get on OSPs Non-preferential tow listing in the initial application process is where OSP would ideally be
screening initial applicants to the rotation program. When I enquired as to how many tow businesses in the previous five years
had failed these initial application/inspections and denied admittance to OSPs rotational listing, it was stated that none had
failed. This did not surprise me in that I had previously accompanied an officer on one of these initial on-site tow inspections to
observe the process.
The two-page inspection sheet used as a guide in the inspections is basically a checklist of yes and no questions, with space for
an explanation of anything marked no. About a third of the questions being asked are not applicable because they are questions
concerning historic records required by OSP to be kept onsite, but since this is an initial application they have little meaning,
and certainly cannot be verified by the officer doing the inspection. The second page of the inspection sheet has to do with
verifying the specific trucks listed on the application are the correct class and equipped with minimally required equipment.
There is no place on the sheet requiring the officer to actually examine the mechanical condition of the equipment they are
inspecting, just a yes or no as to having the listed equipment.
The facility I observed being inspected was a building in which access was gained through the same bay doors as the cars being
stored. The office where customers would have to conduct business was a small trailer also within the bay entrance to the
garage storage area with only a lone chain used to separate entrance and storage area, which makes it questionable as to
whether the entrance by customers is separate from storage area as required by rule.
After completing the check sheet inspection of the two vehicles shown on the application, the officer moved to confirming who
the drivers were for the two trucks being inspected. There was a new driver that had not been listed on the initial application,
which is when the manager interjected that maybe all the companys drivers should be listed. The manager went on to explain
that the company actually had a total of five locations and at least 30 tow trucks. The officer explained that only those drivers
and trucks associated with this location being inspected would be allowed on the OSP rotation listing upon passing inspection.
The manager stated that that is not how their trucks get dispatched and went on to explain that if the two trucks at this location
were not available or one of the companys other trucks happen to be closer, then a different truck and driver from one of the
companys other locations would be dispatched. This explanation of actual business operations would be in violation of OAR

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257-050-0070 (j) that states only equipment approved through the letter of appointment to be used for the non-preference tow
program for a specific tow zone can be used in that tow zone.
The inspection then moved into the businesses office where the officer noted that the tower displayed a city of Beaverton
license even though the business location being inspected was clearly located in the city of Tigard. The manager did not seem
to know whether the business had a license to operate within the city of Tigard. The officer then asked to see the price listing
filed with OSP that is required to be posted and available to the public. The manager was initially unable to find the price
listing, but did locate a listing and proceeded to post it on a bulletin board within the office. Further research that day with the
city of Tigard showed that this business was not licensed even though the business had been operating within Tigard for several
months prior to this inspection. The Tigard website showed that the Tigard business license fee was based on the number of
people employed by the company working in Tigard and that a company could be fined up to $150 dollars a day for not
licensing their business with the city. This particular company may have been new to Tigard but it is not a new company in that
it had operated in the city of Portland for many years, which also requires a business to have a city business license to operate.
Both the OAR and the on-site tow inspection sheet mailed to the business explain that proper city licensing is a requirement to
being accepted onto OSPs rotation listing.
This business had many months to prepare for the inspection, yet several inconsistencies with OSPs rules were noted. Though
this business was able to correct the above-mentioned discrepancies it is overly apparent that this business had not actually read
the rule requirements of OSPs Non-preference towing. It should be expected that on the one and only day of inspection this
business would have had a city of Tigard business license, a price listing previously submitted to OSP posted, and would not
have explained to the officer their business model of calling out other trucks and drivers from one of the companys other
locations that would lead to dispatching trucks and drivers not previously approved by OSP. As a control an OSP inspection
sticker is issued to be placed on the tow truck, but there is no designated spot on the truck where the sticker is to be placed and
it is questionable as to whether all officers in the field know to look for this sticker. There is no system in place that would
record truck and driver arriving for a tow that would then cross-reference within the system for authentication of both truck and
driver.
A quick search of the Better Business Bureau showed that on a rating scale of A+ to F, the business being inspected was given
an F rating. Although not an OSP requirement for being accepted onto its rotational listing, it may be a good indicator as to
what can be expected in the future of this tow business by both OSP and the public.
The initial inspection acts as the only required external inspection a tow business may ever receive. Once a tow operator is
accepted onto the rotational non-preference listing, they then file the annual application report by self-inspecting. This means
that after passing initial inspection this tow company can then add additional trucks that do not require an initial OSP
inspection. Because there are only self-inspections done after the initial inspection, none of the questions referring to invoices,
voided invoices, OSP release forms, and appointment letters that are required to be kept onsite never really get viewed by OSP
in any systematic way. It is quite possible that any company could correct any discrepancies noted to pass the initial inspection
and then revert back to old ways knowing there are no ongoing external inspections that would prevent such behavior.
CAD System and Tow Data
The CAD system is an integral part of OSPs Non-preference Tow program. Basically how the program works is that the CAD
system has a map of Oregon embedded into the system so that when an officer calls into dispatch, the dispatcher can pinpoint
the location the officer is calling from. Overlaid over the embedded state map within CAD is an additional mapping of all OSP
tow zones. When an officer calls dispatch describing vehicle/vehicles needing to be towed, dispatch knows the officers
location requesting a tow. The dispatcher presses a key on their keyboard which engages a subsystem (Rotation Services)
which automatically selects the next tower on the rotation within that zone. Only if the system was down would a dispatcher
intercede to manually select from rotation listing.
The Non-preference Tow program involves the managing of tow businesses associated with OSPs Non-preference tow listing
and acts as the administrative liaison to the CAD administrator on updates to the agencies rotational tow listing. An interview
was conducted with OSPs CAD administrator and OSPs Dispatch as to program oversight of what records are retained of the
rotation calls. The following bullets represent some of the types of data that may or may not be recorded in the OSP CAD
system:

Calls accepted by carrier Yes, but dependent on dispatcher entering notes.

Calls not responded to by carrier Yes, but dependent on dispatcher entering notes.
Carrier refuses call Yes, but dependent on dispatcher entering notes.

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Timeliness of towers Yes, but dependent on dispatcher entering notes.

Special requests did not use rotation list Yes, this would be a preferential tow that would not be using the CAD
subsystem of Rotational Services. Documentation would be dependent on dispatcher entering notes.
Initial Inspections by OSP No
Annual self-inspections No
Qualifications and readiness of towers from rotation list No
Prices being charged by towers using the rotation list No

There currently are no standard reports being run from the data being captured in CAD that would be used as a basis for
monitoring either real-time or historical activities of tow companies. Per the CAD administrator, the system has the abilities to
have queries run on any of the above activities that have been answered yes to, but that would require contacting the CAD
administrator who would then need to have a Sequel programmer write a query to extract the needed data. The above listings
marked no are not in the CAD system but are retained by the OSP tow coordinator in a separate system. It is the tow
coordinator who contacts the CAD administrator to perform any administrative updating such as the adding or deleting of
towers from the rotational listing.
It would seem both reasonable and logical that if there is going to be any consistent accountability enforcement by OSP of
towers, it must first be determined exactly why and for what the tower should be held accountable for. Would OSP prefer to
know how often individual towers miss calls, refuse calls, accept calls, how long did it take tower to show up, how long did it
take tower to complete tow, did the proper equipment show up, was both the driver and vehicle that showed up from the
approved listing, was the equipment in good working condition, did the equipment break down, did the tower charge according
to previously submitted price listing, were there complaints about tower from individual being towed? OSP will need to weigh
the costs of collecting specific data with the benefits in the form of controls. Once OSP has decided what and why data is going
to be collected they need to decide just how will this data be collected? Also, who will be using this data and how often is it
needed? Will the officer in the field be imputing this data or will that be done by dispatch or maybe a combination of both?
Should this data automatically be queried (written by IT) and sent out in some form of daily/weekly/monthly report to
designated individuals with program oversight, or should the existing CAD system be enhanced to a level that non-IT staff
could perform ad hoc queries as needed, or maybe some combination of both? Does OSPs current system have the ability to
support the data collection and reporting needed to effectively monitor towers, or are there other viable options?
Third Party Administrator
Should OSP invest in updating and maintaining its CAD system to incorporate the tracking and reporting of the previously
mentioned data, or would it be more feasible and efficient to use a third party administrator to handle these administrative
duties of tow companies? As part of this audit, one of the objectives was to review what other police agencies within Oregon
and other states were doing with their tow programs. What was found is that many cities and counties have opted to go with
third party administrators instead of expanding their existing CAD systems. These systems are not meant to replace law
enforcement CAD systems, but instead, are used to augment existing CAD systems or in some cases used as stand-alone
systems, depending on agencies wants and needs.
I was provided an opportunity to observe firsthand Clackamas County Sheriffs use of such a system. In Clackamas, the third
party administrator is a stand-alone system that does not require any additional use of the Sheriffs existing dispatch or IT
departments. The program uses web-based software that can be deployed as a stand-alone system or it can be integrated with
existing CAD/RMS systems. Clackamas has 8 separate tow zones that make use of a rotational system similar to OSP in that
there are different rotation lists within each zone. The third party administrator mapped Clackamass 8 zones and existing
towers already being used within these zones.
How the system works as used by Clackamas is that the officer on the scene logs into the system to populate required minimum
fields. This can be done by the officer on the scene or in some cases the officer may have another officer do this for them,
which the system will document, who is requesting a tow on behalf of whom. The system then dials the first tow company on
the list for that zone. In the case of Clackamas, they allow 6 minutes for a tow company to respond before moving on to the
next company. Their contract says 3 minutes but they were giving 6 minutes until everyone has become familiar with the
system. Clackamas uses a 30-minute minimum tower arrival time. The system gives estimated time of arrival, but then also
records actual time of arrival and departure. The live example being shown to me recorded that the first company at the top of
the rotational listing for the zone needing a tow did not respond within six minutes, so the system automatically moved on to

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the next company on the list which responded in about 30 seconds accepting the tow. It was explained that the company that
had missed the call has had problems with failing to respond and that the system could generate reports showing towers history
of missing calls.
I was shown another part of the system that documented where a tow from the previous day had taken place. In this case, we
were looking at an example of a system generated letter that was going to be sent out to owners informing them that their car
had been towed, by whom, what the charges were for, and what the cost to retrieve the vehicle from the tower would be. These
automated letters are similar to the letters OSP field offices currently send out manually. Clackamas has listed categories on
what towers can charge fees for and caps on how much can be charged within these categories as part of their contract with any
tower on the rotational listing. This particular tow we were looking up had double charged on the $25.00 administrative fee
allowed in the contract. It had also charged for a heavier duty tow truck when a lighter truck was all that was required. The
sergeant showing me the system immediately called the company up and informed them of their billing mistakes. The tow
company acknowledged the mistakes and stated that they would go into the system and correct the letter.
The third party vendor being discussed charges no fee to Clackamas County Sheriff for its services but instead gets paid by
charging a $12.50 administrative fee that gets billed to the tow company on each tow generated through the third party system.
The tow company can choose to pass on the $12.50 fee plus an additional $12.50 for a total of $25.00 that can be charged to
the customer as an administrative tow fee. It was explained that per contract that overcharging of customers or failing to
respond to tow requests was a couple of the many reasons a tower could be suspended from the Sheriffs rotational listing.
The above example is not meant to show specifically how a third party system administrator would work for OSP, but it is an
example of how a real-time third party system tracking specific metrics can be utilized in holding towers accountable. In the
above scenario, it was explained that one sergeant manages several other programs and also handles the agencys entire
oversite of the third party system that includes reports, audits, and vendor assisted system changes. Clackamas is one of 36
counties in Oregon and represents about 10% of Oregons population which means the same level of management oversight of
a similar system by OSP would require a much larger time commitment. The management oversite of such a program could
either be centrally located at OSPs GHQ or evenly distributed among statewide area command centers.
It was pointed out during the audit by OSP Procurement that DAS does not believe that state rule and law allow OSP to
contract with any company and have the owner of the towed vehicle pay the cost. These restrictions do not appear to apply to
non-state entities such as city and counties. Essentially the rules and laws applicable to state contracting do not allow the state
to obligate a third party who is not a party to the contract to shoulder the costs or fees. A possible solution would be to have the
vendor bill OSP directly and then OSP could recoup the money with an administrative fee to either the vehicle owner or the
tow company making the tow.
Its not likely that OSP would use a third party administrator in exactly the same way as Clackamas County Sheriffs, but the
idea of using a third party to supplement the existing CAD system with the ability to record, track, send automated letters, and
report towing data in a meaningful way that OSP currently cannot, may be a viable option. With the exception of the additional
collection of control data, it may be that much of the change could be done behind the scenes in the way of a third party
administrator interacting directly with OSPs existing CAD system.
The key here is to look candidly at the existing CAD system and determine exactly how it is currently being used and exactly
what it would take to modify and upgrade the existing system to record, track, send letters, and report towing oversight data in
a meaningful way versus what could be provided by a third party administrator. Also, just saying OSP has the ability to build
and maintain such a system does not mean that it would be accomplished anytime soon. Any internal solution should also
consider when exactly would this be done internally versus the timeline a third party administrator might provide.
Inconsistencies and Gap within in Policy, Rule, and Law
OSP currently attaches an orange sticker tag (Form 56) to vehicles appearing disabled or abandoned in excess of 24 hours on
highway right of way stating the authorization of removal. In OSP policy 502.3 Abandoned Vehicles it states that the vehicle
will be towed if not removed in 24 hours and that the tag attached to vehicle serves as notice, and that no post-tow letter is
required on vehicles that are towed. If an individual does not make it back to their vehicle within the 24 hour timeline and the
vehicle is towed, how do they become informed of what is on the notice concerning the violation, who to contact, and appeal
rights, if the tag is affixed to the towed vehicle that then ends up in some tow yard? The next and only required notification
appears to be in the lien process, and only where the appraised value of the vehicle is greater than $500. If the value is greater

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than $500 dollars then according to ORS 819.160 (3) A person that tows any vehicle at the request of an authority under ORS
819.110 or 819.120 shall transmit by first class-mail with a certificate of mailing, within 20 days after the vehicle and its
contents are placed in storage, written notice, approved by the authority, containing information on the procedures necessary to
obtain a hearing under ORS 819.190. The notice shall be provided to the owner, a person entitled to possession or any person
with an interest recorded on the title to the vehicle. Although maybe not required by law it would seem reasonable to send out
a timely form letter to the address of registered owner informing them their vehicle has been towed, along with hearing rights
and responsibilities.
This same notice being affixed to vehicles references appeal rights that the individual may challenge the reasonableness of the
towing and storage charges. ORS 819.170 (2) (g) states That the owner, possessor or person having an interest in the vehicle
may also challenge the reasonableness of any towing charges at the hearing. This notice would seem to give an expectation to
those being towed that the reasonableness of towing and storage charges can be addressed in OSPs hearing process, yet OSPs
own OAR 257-050-0150 (1) & (5) state that (1) The Department shall not establish, recommend or in any way dictate the cost
of a non-preference tow conducted by a qualified tow business, and (5) Complaints of unfair charges against a qualified tow
business shall be referred to the Oregon Attorney General's Office.
In following the same ORS 819.170 (2) (g) ODOT appears to use their OAR 734-020-0148 (7) as a disclaimer by stating If
the person requesting the hearing contests the reasonableness of the charges for towing and storage, the District Manager, or
designee, shall consider such request only when the department has used its own personnel, equipment and facilities for the
towing and storage of vehicles and shall provide a determination concerning the reasonableness of the department's charges in
the written statement of the results of the hearing. It is assumed that ODOT has taken this stance since like OSP; ODOT has
chosen not to regulate the price charged by towers used in nonconsensual towing of ODOT mandated tows.
Because OSP is not likely to use its own equipment for towing, it would seem reasonable that the notice should state a
disclaimer similar to ODOTs OAR 734-020-0148 (7) that reasonableness of towing and storage charges will only be
considered in hearings when OSP uses its own personnel equipment and facilities for the towing and storage of vehicles. If
OSP were to change its existing rules and begin regulating towing charges, it would also likely follow that OSP would
adjudicate reasonableness of charges based on ORS 819.190 (7), which states A hearing under this section may be used to
determine the reasonableness of the charge for towing and storage. Towing and storage charges set by law, ordinance or rule or
that comply with law, ordinance or rule are reasonable for purposes of this subsection.
The current rules require tow companies to have dispatch services 24/7 but do not allow OSPs Dispatch to call for tows on
abandoned vehicles 24/7. It is reasonable to allow towers to not actually conduct the tow until the hours of between 8-5, but
why burden OSP Dispatch with the requirement of pending abandoned vehicle tow requests received from troopers until the
hours of 8-5? This rule adds additional work/responsibility by not allowing the abandoned vehicle call from the officer to the
dispatch to the tower in the regular process. It creates additional costs to OSP in the form of steps and rework by Dispatch in
pending abandoned vehicle calls. The tower is required to have dispatch services 24/7 and should be able to take the call at any
hour of the day, but then only be responsible for removal between the hours of 8-5. This would avoid additional workload
(cost) to OSPs Dispatch.
Tow Program Training
There currently exists no training program within OSP clarifying at a program level what the existing law, rule, policies, and
practices are meant to accomplish. There is no training for those new to managing the tow program nor is there any training for
the officer or OS2 in the field attempting to make the tow program work. Without some structured form of program
management based training being given there is not likely to be consistent application of law, rule, policies, and practices
needed in governing the tow program.
Benchmarking
As part of the audit, I was able to spend part of a day in Vancouver Washington accompanying a Tow Truck Trooper/Inspector
from Washingtons State Patrol (WSP) Commercial Vehicle Division. Washington has eight districts with one full-time Tow
Truck Trooper/Inspector assigned to each district. The eight inspectors report centrally to a sergeant at WSPs headquarters
who is responsible for coordinating the statewide program.
According to the Inspector I met with, each inspector is responsible for monitoring and annually inspecting approximately 40
to 60 tow companies within an assigned area. Each year there is an annual inspection of the place of business that includes
inspection of towing records, and a commercial vehicle safety alliance (CVSA) inspection of all tow trucks. CVSA is a North

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American not-for-profit organization comprised of local, state, provincial, territorial and federal motor carrier safety officials
and industry representatives from the United States, Canada, and Mexico. WSP has a Towing and Wrecking site within their
system that stores inspection data on tow companies from its eight separate districts that can be accessed by the individual tow
inspectors. From this system the officer was able to access and print the following sample of a Tow Inspection Summary
Report:
Tow Inspection Summary Report
WRITTEN WARNING ON TRUCK #1

TAIL LIGHT-INOP-LS

CROSSMEMBER MISSING BOLT

UNSECURED USED FIRE EXTINGUISHER

NO PROOF OF PERIODIC INSPECTION

WRITTEN WARNING ON TRUCK #2

NO PROOF OF PERIODIC INSPECTION

BED CRACKED- REAR-RS

BED RAIL RUBBING SON PIVOT- METAL SHAVINGS

BUSINESS

MISSING NOTICES OF SALES TO INSPECTOR- ONLY 3-2-16 & 4-19-16 ON FILE

MISSING PROCESSED AVR FOR SALE 4-19-16

MASTER LOG NOT MAWTAINED- MISSING LIEN AMOUNTS ON SOME VEHICLES

INVOICES NOT ITEMIZED FOR LIEN AMOUNTS

MISSING CERTIFIED MAILING RECEIPTS

SALE AND CUSTODY LETTER MAILED LATE

OWNER/ DRIVER WENT TO OREGON IN JUNE/2016- NO MEDICAL CARD

ROI TO DOL FOR FOLLOW UP. ROI = results of inspection, DOL = department of licensing

What the above Tow Inspection Summary Report demonstrates is an actual annual external inspection of business records and
tow trucks by WSP of a tow business that is allowed access to the Washington State Patrols rotational listing.
In addition to visiting Washington, I was able to conduct a phone interview with the tow coordinator for the California
Highway Patrol (CHP). CHP like WSP does annual inspections of towers allowed onto their rotational listing. CHP annually
confirms that towers have a motor carrier permit as required, business licenses, and any city permits that may be required. They
utilize two officers in inspecting all tow trucks during annual inspections. One officer is a commercial vehicle inspection
officer that follows federal guidelines when doing vehicle inspections. If 50% of a tow companies trucks fail an inspection then
the tower is taken off the rotational list. The format as to where inspections are done varies as to whether inspections are done
at the vendor or some other site. Usually, an area command will set up a schedule that will take a few days or week to inspect
trucks, and in some instances, different area commands will coordinate their truck inspections by having trucks come to some
central location to be inspected. Vendors and their drivers are required to be fingerprinted, which the vendor pays for.
Fingerprint-based background checks are done, which CHP is able to flag so that CHP will receive subsequent notification on
changes that would disqualify a tower. The towers remain in the system until CHP submits a no longer needed form. If the
tower leaves the system longer than 12 months by moving into another occupation, they then must resubmit prints when
returning to the towing industry. CHP also does random audits at its 108 offices, and audits that originate through consumer
complaint investigations. If the audit finds discrepancies such as overcharging then the tower must rectify any overcharging by
showing proof that all customers have been fully reimbursed by the amount of any discovered overcharge before the tower is
allowed back on the rotational listing. Sometimes the district attorneys get involved because of the criminal act of
overcharging.
The states of Washington and California have extensive law and rule that assist their state police in governing the towing
industry. They both also have robust compliance divisions within their respective agencies ensuring that those laws and rules

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are being enforced. Oregon by contrast appears to rely more on OSPs limited written rules and an almost nonexistent
compliance function to regulate the towing industries compliance with those rules.
Federal and State Law
Due to federal deregulation of the motor carrier industry in the early nineties, there have often been questions as to the
individual states authority versus the federal governments authority to regulate Tow Companies. Does the federal government
have the exclusive right to regulate the tow truck industry? A closer examination of federal and state authority can be found in
the Code of Federal Regulations (CFR), which presents the official text of agency regulations. The following excerpt from
Title 49 Subtitle IV Part B Chapter 145 Section 14501(c) explains federal authority:
14501. Federal authority over intrastate transportation
(c) Motor Carriers of Property.
(1) General rule.Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political
authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and
effect of law related to a price, route, or service of any motor carrier (other than a carrier affiliated with a direct air
carrier covered by section 41713(b)(4)) or any motor private carrier, broker, or freight forwarder with respect to the
transportation of property.
(2) Matters not covered.Paragraph (1)
(A) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of
a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or
the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to
minimum amounts of financial responsibility relating to insurance requirements and self-insurance
authorization;
(B) does not apply to the intrastate transportation of household goods; and
(C) does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law,
regulation, or other provision relating to the price of for-hire motor vehicle transportation by a tow truck,
if such transportation is performed without the prior consent or authorization of the owner or operator of
the motor vehicle.
(3) State standard transportation practices.
(A)Continuation.Paragraph (1) shall not affect any authority of a State, political subdivision of a State, or political authority of 2 or more
States to enact or enforce a law, regulation, or other provision, with respect to the intrastate transportation of property by motor carriers,
related to (i) uniform cargo liability rules, (ii) uniform bills of lading or receipts for property being transported, (iii) uniform cargo credit
rules, (iv) antitrust immunity for joint line rates or routes, classifications, mileage guides, and pooling, or (v) antitrust immunity for agentvan line operations (as set forth in section 13907), if such law, regulation, or provision meets the requirements of subparagraph (B).
(B)Requirements.A law, regulation, or provision of a State, political subdivision, or political authority meets the requirements of this
subparagraph if (i) the law, regulation, or provision covers the same subject matter as, and compliance with such law, regulation, or
provision is no more burdensome than compliance with, a provision of this part or a regulation issued by the Secretary or the Board under
this part; and (ii) the law, regulation, or provision only applies to a carrier upon request of such carrier.
(C)Election. Notwithstanding any other provision of law, a carrier affiliated with a direct air carrier through common controlling
ownership may elect to be subject to a law, regulation, or provision of a State, political subdivision, or political authority under this
paragraph.

In 2015 the following amendment was made to the above Section 14501(c)(2)(C) of title 49 Subtitle IV Part B Chapter 145.
The wording of the amendment broadens the state right from the price for-hire for tow trucks to regulation of tow truck
operations in nonconsensual towing.
(C) does not apply to the authority of a State or a political subdivision of a State to enact or enforce a law, regulation, or other
provision relating to the regulation of tow truck operations performed without the prior consent or authorization of the owner
or operator of the motor vehicle.
The Oregon state legislature has previously summarized and further defined Oregons interpretation of (14501 Federal
authority over intrastate transportation) in the following Oregon Revised Statute 98.850:
ORS 98.850 Legislative findings and declaration. (1) The Legislative Assembly finds that:
(a) 49 U.S.C. 14501(c)(1) limits the authority of the state and political subdivisions of the state to enact or enforce laws or
ordinances related to price, route or service of motor carriers with respect to the transportation of property.
(b) 49 U.S.C. 14501(c)(2)(A) exempts, from the limits described in paragraph (a) of this subsection, safety regulations with
respect to motor vehicles.

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(c) 49 U.S.C. 14501(c)(2)(C) exempts, from the limits described in paragraph (a) of this subsection, laws or ordinances
relating to the price of for-hire motor vehicle transportation by a tow truck if the transportation is performed without the
prior consent or authorization of the owner or operator of the motor vehicle.
(2) The Legislative Assembly declares that:
(a) Statutes that assist members of the public in avoiding involuntary loss of use of motor vehicles and in expediting
recovery of motor vehicles and the personal property in the motor vehicles promote the safety and welfare of
members of the public.
(b) ORS 98.810 to 98.818 do not preempt any authority that a local government, as defined in ORS 174.116, may
have to regulate the price of for-hire motor vehicle transportation by a tow vehicle if the transportation is performed
without the prior consent or authorization of the owner or operator of the motor vehicle. [2007 c.538 1]
The above ORS 98.850 citing of 14501(c)(2)(C) has not been updated to include the 2015 code amendments, but it would
appear that the above citing of 49 U.S.C. 14501(c)(2)(C), and the declaration within 2(a) and 2(b) of ORS 98.850 that Oregons
intent to emphasize that the state and its political subdivisions have the authority to enact and enforce law related to the price of
for-hire in nonconsensual towing, and matters related to safety. The amendment to 14501(c)(2)(C) now further broadens states
authority of tow truck operations beyond the narrow scope of the price of for-hire to simply regulate tow operations if the
transportation is performed without the prior consent or authorization of the owner or operator of the motor vehicle.
There are already many other states, counties, and cities within the U.S that have instituted price caps on nonconsensual
towing. Within Oregon, both Clackamas county and the city of Portland have chosen to implement fee caps on nonconsensual
towing.
Fee Caps
One of the objectives of this audit was to research OSPs ability within the program to hold tow companies more accountable
and discern possible ramifications of doing so. The capping or regulation of towing and storage fees associated with OSPs tow
program is a direction OSP could move that would help ward off continued complaints from the public of some towers
charging unreasonable rates when using OSPs rotational system of selecting towers. As previously discussed there appears to
be no federal or state law preventing OSP from implementing fee caps or fee structures similar to what has already been done
by other states, or counties and cities within Oregon.
Both of the other western coastal states of California and Washington have some method of regulating their nonconsensual
towing rates within the State Police. Washington uses a system where as the chief of the Washington State Patrol or designee
annually establish maximum hourly rates for each class of tow truck and maximum daily storage rates that tow operators may
charge for services as a result of state patrol calls. This is done by consulting with members of the towing industry, review of
private towing rates, and any other factors the chief deems appropriate. California, on the other hand, believes no one rate
would be equitable statewide so they do not establish a statewide rate. Instead, they leave it up to Area Commands to determine
what towing rates within their zone responsibility would be reasonable. The reasonableness of rates is determined using
telephone quotes, invoices, posted rates, and what is charged to retail customers, etc. Towers submit their rates which get
reviewed by the Area commander who determines reasonableness. If the rates are determined to be unreasonable the tower is
allowed one resubmit. If the resubmitted rate is determined to be unreasonable and/or invalid the tower shall be disqualified
from participating in that class for which the rate was deemed unacceptable until the next annual enrollment period.
Currently, OSPs own administrative rule prevents the department from establishing, recommending, or in any way dictating
the cost of a non-preference tow conducted by a qualified tow business. The primary emphasis of the current program seems to
be more about approving towers into the rotational program and assuring the rotational system is unbiased toward individual
tow companies than protecting the citizens of Oregon from possible predatory towing practices by some of these same tow
companies allowed onto the OSP rotational listing. The actual oversight responsibility of towers allowed onto OSPs rotational
listing appears to be lacking.
If OSP chose to institute a fee caps structure for its nonconsensual towing then it would need to do research as to what rates
would be reasonable. Any established rates would have to be accompanied by controls ensuring what and how much can be
charged by towers is actually what gets charged. This can only be accomplished by some form of a formal external review of
the tow company records that will require a trained workforce designated to enforcing compliance with a fee cap structure.
Simply changing the rules or passing laws will not compel compliance. There must also be some form of actual oversight to
ensure compliance with rule or law.

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OSP could choose to use a fee structure similar to either Washington or California or maybe something based on regions.
There is likely to be some pushback from tow companies in being regulated and any establishing of rates should be done in
consultation with the Oregon tow industry, but as previously mentioned there are already cities and counties within Oregon that
regulate towing within their jurisdiction. To be clear the regulating of nonconsensual towing does not regulate consensual
towing. An example of consensual towing would be when an individual calls the tower directly and negotiates the picking up
of their disabled or wrecked vehicle. They the consumer decides who tows their vehicle, when their vehicle is towed, and
where the vehicle is to be towed to. Consensual towing rates are freely set by each individual wrecker service. Nonconsensual
towing is towing of a vehicle under lawful circumstances by any law enforcement officer necessary for the public interest
including removal from the roadway for public safety, public convenience, or accidents.
If pricing is to be regulated the towing companies are likely to regularly lobby for towing rates to be increased and are likely to
base their lobbying efforts on represented costs which could be subject to manipulation. To avoid the prospect of annual
lobbying for increased costs OSP could build an automatic inflator into the rates, such as a consumer price index (CPI) based
inflation adjustment into the allowable rates, accompanied by new surveys every 3-5 years for more definitive analysis.
Because of OSPs self-imposed rule restrictions of not dictating costs, there is nothing in the rule preventing tow businesses
from submitting what could be considered unreasonable charges on their itemized list of charges. Even if a towing business
were to list what could be considered reasonable rates and charges on its itemized listing, OSP has no mechanism in place,
such as routine or random inspection of invoices that would monitor or enforce rule violations of charging higher rates or
adding other types of charges than what has been submitted to OSP. The enforcement of the rule as it stands relies
overwhelmingly on tow businesses to self-regulate. This is theoretically accomplished by having tow companies conduct
annual self-inspections and sign agreements once a year stating they are following the rules. Complaints from consumers to
OSP are supposed to be referred to the Oregon Attorney General's Office for resolution, but there is no central tracking by OSP
as to individual complaints forwarded to the AGs office, let alone whether there has been any resolution to these complaints.
Contact with the AGs office confirmed that they do take complaints referred by OSP as well as those directly from citizens,
but it could not be established as to whether the AGs office would be able to provide actual statistics of complaint referrals
from OSP separate from citizen complaints.
Without some form of central tracking of complaints that will provide a complete history of individual complaints on a
particular tow company and the industry as a whole, there is no way to consistently and fairly hold individual tow companies
accountable. OSPs own limited rules are lacking in enforcement and the current systems controls do not allow those currently
charged with administering the program to effectively manage and hold those in the towing industry accountable. A move
toward capping tow fees would involve a rewriting of existing administrative rule, but any serious movement to improve
compliance will involve rewriting the rules.
Complaints to AGs Office
OAR 257-050-0150 (1) states that The Department shall not establish, recommend or in any way dictate the cost of a nonpreference tow conducted by a qualified tow business. It also states in OAR 257-050-0150 (5) that Complaints of unfair
charges against a qualified tow business shall be referred to the Oregon Attorney Generals Office. Internal audits inquired as
to what sort of monitoring the OSPs tow program does in the way of tracking the number of towing related complaints of
unfair charging that has been forwarded by OSP to AGs Office. The answer was that there is no tracking, but that the
complaints are simply referred to the AGs Office, and that patrol offices are encouraged to do the same if they receive these
types of complaints. In follow-up with a field office, it was asked if they forward tow company complaints about unfair charges
received to GHQ Patrol or the AGs office, and the response was that they tell complainants to contact the Better Business
Bureau.
Because OSP has no statewide mechanism in place for tracking complaints of unfair charging against towers using OSPs
rotational system, OSP really has no idea as to the magnitude of those complaints. OAR 257-050-0150 (3) states Qualified
tow businesses shall furnish the Patrol Services Division with an itemized list of charges that can be incurred during a nonpreference tow., and OAR 257-050-0150 (4) states Qualified tow businesses shall not charge for items not charged on the list
relating to the towing of a vehicle. Though the rule requires towers to submit a listing of charges that can be incurred and does
not allow towers to charge for items that have not been submitted, OSP simply has no compliance function in place to enforce
its own rules. To have a policy that abdicates its oversite responsibility of regulating the tow pricing of OSP initiated towing
does not shed a good light on OSP. The public should have the expectation that any tow initiated by OSP is with a business that

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is held to the same high standards OSP expects of itself. Access to OSPs rotational list should not be considered as a right of
every tow company within the state, but only to those companies that meet and consistently maintain a high standard.
Inventory of Vehicle Contents
The audit did some benchmarking with other police agencies as to whether they conduct inventories of vehicle contents prior to
being released to a third-party towing company. It was found that the Washington State Patrol, California Highway Patrol,
Clackamas County Sheriffs, and Portland City Police all do some form of inventorying the contents of vehicles being towed.
Though the benchmarking showed other law enforcement agency are doing some form of inventorying, the time constraints of
the audit did not allow adequate time to explore the effectiveness of these inventories and the time commitments of resources
on those agencies conducting inventories of law enforcement directed tows. Without further research, the audit is not able to
make any recommendations in this area.
Expansion of Program
Few of the observations and the corresponding recommendation made within this audit, with the exception of 3 rd party
management, can be done without expanding the tow program to include additional FTE. The real fix to the tow program
should start with first admitting that OSP does not have sufficient staffing supported by adequate technology and policy to
effectively run even a limited tow program. Both of the comparisons made to Washington and California show that they have
more robust Tow Programs than Oregon, and to even approach these levels will require a much larger investment in the
program than what currently exists.
The observations made within this report are not meant to disparage anyone charged with the duties of managing, coordinating,
or carrying out field duties of processing or inspecting. On the contrary, the people associated with the program are doing as
well as can be expected considering that they are under-resourced in staff, technology, rules, and policy to make an effective
program.
Other Criteria to Consider

Policies and procedures for ensuring that the OSP utilizes the services of towing companies on the OSPs rotation list
that are accessible to individuals with disabilities.
Mandatory minimum training for tow drivers Training, Experience, and Other Requirements for Drivers. Some tow
truck contracts establish minimum training and/or experience for drivers responding to incident scenes.
Mandatory Acceptance of Credit Cards - Gives individuals added protection in disputing charges through their credit
card companies. This would also include a clause such as Washington that if the tow companies credit card machine
happens to be down then they must then accept a personal check with proper ID in lieu of a credit card. See
Washingtons rules for more detail.
The conducting of mandatory annual tow meetings in a mutually benefiting atmosphere to discuss requirements of
tow program in an effort to review prior years activities and any changes to the current program, or possible gray areas
that need further explanation.
Tow Service Agreements (TSA) Signed agreements outlining rules that all tow companies will abide by.
Include OSP contacts for consumer complaints.
Require use of mandatory pictures of both inside and outside of a vehicle to be taken by those towing the vehicle.
Stringent application and inspection process that did not allow the admittance of towers failing an initial inspection
until reapplying for an inspection six months to a year from the date of failed inspection.
Establishment of a Tow Truck Complaint Resolution Committee

If management intends to move forward with some or all of the audit recommendations made, then a substantial rewrite of the
existing rules and policy will need to take place. Should management choose to make no changes to the existing program goals
then the current policies and rules will still need updating to address better readability and references to nonexistent or updated
policy/law.
Acknowledgement & Recognition
Internal audits would like to thank the Police Service Bureau and all program personnel for their cooperation in conducting this
audit.

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Audit Report No. 01 December 31, 2016

Oregon State Police

Internal Audit recommends OSP:

Risk
Ranking:

1.

Define clear Operational Goals

as to what the Non-preference
Tow program is meant to
accomplish.

High

2.

Define realistic staffing

levels needed to support
operational goals.

High

3.

Define program training needed

of all staff supporting
operational goals.

High

Management Response:

Agree. A program recommendation is currently

being authored and will be forwarded to the Bureau
Commander for consideration. Once Operational
Goals are defined, the goals must be compared with
what statutorily OSP is mandated to do.
Agree. A program recommendation is currently
being authored and will be forwarded to the Bureau
Commander for consideration. Based on the
proposed staffing level recommendations, the need
for a 2019-2021 Legislative Policy Option Package
will be explored. Currently, OSP does not have
additional resources available to dedicate to the
program. Any type of expansion of the program will
require additional funding sources. It is too late to
submit a Legislative Policy Option Package for
2017-2019.
Agree. OSP currently utilizes Policy Tech as a
way to conduct on-line training throughout the
agency. A training module will be created and sent to
staff that support the operational goals of the Towing
Program. This will enable OSP to ensure and verify
all staff is trained to the same level.

Expected
Completion
Date:
6/1/2017

6/1/2017

6/1/2017

We will also review our on-site tow company

inspection procedures and make necessary
adjustments in training and procedures to ensure
thorough and complete inspections are performed.

4.

Define supporting
operational data
collection needs (what &
why) and systems
delivery needs (how).

High

5.

Create and update rules

& policy that support
program operational
goals.

High

OSP will review Policy 502.4 (Towing Policy) to

ensure it contains the following elements:
1. An appropriate Purpose Statement that is in-line
with the defined Operational Goals, as outlined in
#1 above
2. The correct Procedures outlined for staff to
follow in order to adhere to the policy
3. The appropriate Rules listed for staff to refer to
for clarification when needed
Agree. OSP will determine what statutorily OSP
needs to be collecting based on current ORSs and
determine what supporting operational data should
be collected for the improvement of the program.
Agree. Work is currently being done with DOJ to
revise OARs. A temporary change has been
initiated on a portion of the OAR while we work
through the process for a finalized product.
Conducting a rewrite of existing OARs is a labor
intensive process. In 2014, DOJ provided advice
that, historically, it takes a full year for their agency
to conduct a legal review of an OAR Division. The
Tow Program is located under OAR 257-050. There
are approximately 20 rules contained in Division 50.

6/1/2017

7/1/2018

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Audit Report No. 01 December 31, 2016

SCOPE AND METHODOLOGY

In order to meet the audit objectives, applicable state policies and law were reviewed. Additionally, key personnel internal to
the agency were interviewed, as well as external benchmarking. The scope of the audit was limited to current operations.
This audit was conducted in conformance with the International Standards for the Professional Practice of Internal

Auditing.

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