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Thursday, September 17, 2009

OK Wreckers Stalled By High Costs

Arrow Wrecker Service of Oklahoma City tows a car. (Photo by Maike Sabolich)
Here's The Journal Record story:
OKLAHOMA CITY – Since 2004, Tommy Burrows’ insurance cost on six tow trucks has increased 36 percent. During the same period, the cost of workers’ compensation coverage for his Liberal Area Radiator and Towing in Turpin has doubled. Payroll costs have risen about 77 percent, although Burrows has fewer employees.
Based in the Panhandle, Burrows told state senators Wednesday that his wreckers may have to travel up to 90 miles to reach a vehicle. He said 35 to 38 percent of towing charges are never paid.
Burrows was among several wrecker-service owners appearing before the Senate Public Safety and Homeland Security Committee to ask for a 25-percent increase in towing fees for nonconsensual tows, wrecker calls made by law enforcement.
“That will just barely cover the equipment raises we’ve had,” he said.
Burrows said the cost of a heavy-duty wrecker rose from about $105,000 in 2004 to $130,000 in 2008.
Chris Puckett, with Pucketts Inc. in Oklahoma City, said wrecker-service companies are also seeking a 50-percent increase in hourly (work and wait) fees for heavy vehicles. Increases are also being sought for storage and mileage
“Many wrecker operators are in dire straits,” Puckett said.
He said wrecker fees, which are set by statute, have not been increased for almost six years.
Currently, the statutory hookup charge for light-duty vehicles is $65, with a $60 hourly rate. Rates for medium-duty vehicles are $75 for a hookup, $80 hourly. The Oklahoma heavy-duty hookup rate is $85, with a $180 hourly rate.
Puckett said that compared to rates in surrounding states, Oklahoma’s are low.
According to a rate chart from the Oklahoma Wrecker Owners Association, only New Mexico’s light-duty hookup rate, at $55, is less than Oklahoma’s. Rates attributed to specific companies in Arkansas, Kansas and Texas, which do not have statewide rates like Oklahoma and New Mexico, ranged from $85 to $202.50.
Medium-duty hookup rates cited for companies in nearby states ranged from $100 in New Mexico to $190 in Gainesville, Texas, with heavy-duty rates ranging from $200 in New Mexico to $375 in Gainesville.
Jimmy Robertson, with Lenox Wrecker Service in Owasso, said towing companies have thousands invested in equipment, property and other costs. He said wreckers can cost $74,000 to $500,000, depending upon how they are equipped and the size of vehicles they are designed to tow. He said equipment alone to operate a large wrecker can cost $5,000.
“We need your help,” he said.
As for being able to sell vehicles that are not claimed, Robertson said that by the time a car has been picked up, towed and stored, a wrecker service may have $1,200 tied up in it, but be able to sell it for only $200 or $300. He said cars taken to a crusher bring $30-$50.
Al Muzny, president of Arrow Wrecker Service in Oklahoma City, said rates need to be increased at all levels, but particularly for heavy-duty trucks.
“They weren’t adequate at the time they gave us the last raise,” Muzny said. “Due to the fact of what the big trucks cost, several times what a small one does, the rates need to be increased more on those to adequately cover the cost and taking care of the public.
Muzny said he has been in the towing business since 1965 and has 30 trucks and other vehicles.
Bryan Albrecht, with Cavin Wrecker Service in El Reno, said many other costs have increased for towing companies. He said that since 2004 fuel costs have increased 72.9 percent. He also said that four out of 10 towing charges are not collected.
Wrecker service operators said Oklahoma is one of few states that set towing rates statewide.
Albrecht said in some jurisdictions individual companies have their rates approved by government agencies.
In Connecticut, maximum rates are set by the Department of Motor Vehicles. In West Virginia, tow-service operators that do not have tariffs approved by the Public Service Commission must adhere to a rate chart.
Puckett said that until the mid-1990s rates for wrecker companies were approved by the Oklahoma Corporation Commission. He said that after the trucking industry was federally deregulated, Oklahoma wrecker rates were not regulated for a time, after which state public safety officials asked the Legislature to establish statewide rates.
Major Rusty Rhoades, with the state Department of Public Safety, said the agency has no vested interest in towing rates, just public safety.

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