IMPOUND LOT: Transportation and Poverty Business
Local & National News | July 19, 2024
Local & National News | July 19, 2024
A recent story aired on Fox13 regarding Daniel Wilkerson’s experience with the City of Memphis Impound Lot regarding his stolen car. Wilkerson was charged $225 for retrieving his car from the Impound Lot. The $225 charge prompted Fox13 to do a story on navigating the City of Memphis Impound Lot.
But before we get into the Impound Lot, I recently saw Wilkerson impressively rockin’ it as a reporter, at City Hall covering MATA. Sadly, much of Wilkerson’s great work went unaired, to include key MATA story points and interview with Council Chair JB Smiley. The previous blog, like this one, also dealt with "Transportation and Poverty" with a focus on MATA and can be accessed below in "Check the Facts." (JustMy).
Anyway, back to the Impound Lot. The local Impound Lot is a business, weighing heavily on the poor and negatively impacting their transportation. Robert Bain formerly supervised the Impound Lot before he was terminated in 2018 on technicalities after he raised concerns with Memphis Police Department (MPD) brass about Impound Lot business practices.
In fact, Bain was featured by WREG in a 2018 Impound Lot story (WREG). As a follow up to the MATA blog, the recent July 9, 2024 Fox13 story prompted me to sit down with Bain and dig further into transportation and poverty regarding the Impound Lot.
The 2018 WREG Impound Lot story, featuring Bain and when MPD operated the lot, discusses the business of the Impound Lot. The lot has recently been privatized and is run today by Vehicle Management Solutions (VMS) out of Tinley Park, IL. The Impound Lot was privatized near the end of the Strickland administration.
Bain describes situations where poor people begged him to allow them to get their baby’s and personal belongings out of their car before their personal vehicle was auctioned off. Vehicles at the Impound Lot are commonly auctioned off when the poor are unable to pay Impound Lot fees to retrieve their vehicles.
Bain went on to describe how the same vehicle is often auctioned off multiple times. When resold, the car dealer gets paid down, at least, what they paid for the car at auction, say $1,100, then finances the remaining sticker price while equipping the cars with tracking devices. When payments are not made, the vehicle is tracked down, repossessed and resold again. Sometimes the same vehicle ends up back on the Impound Lot and resold from the Impound Lot. The Impound Lot is a poverty business.
Bain describes how once a shot aggravated assault victim, who had his car impounded for investigative purposes, once showed back up to retrieve his car after getting out of the hospital. Bain said the individual arrived with a bandaged head mechanically held together with a rod. The victim’s time in the hospital caused storage fees to rack up, which Bain eliminated for the benefit of the crime victim. When he eliminated those fees as supervisor, Bain found himself in hot water with MPD brass. After all, the business of the Impound Lot is storage fees and auctioning cars off, while tow companies get the impound fee.
And then finally, Bain recalls how it was a common occurrence for poor individuals to show up on Monday to retrieve their car and not have the money. Such individuals would then ask Bain how much the charges would be on Friday payday of the same week.
Today the Impound Lot has been privatized. VMS is privately incented to increase Impound Lot revenue. More detail on that in the next section. But briefly as a private business, VMS charges an additional $2.93 per day for sales tax on top of the $30 per day vehicle storage fee that was previously charged when the MPD ran the lot.
When run by MPD, Bain said sales tax was not charged. But the Impound Lot has always been a business weighing heavily on the transportation needs of the poor that now is worsened with the backdrop of a botched MATA public transit system.
Just think about it for a moment. Taxpayers subsidize a $40M downtown Garage Mahal mobility center, where the corporate AutoZone effectively pays $15 per 24 hour day for covered garage parking. Yet, poor taxpaying residents are charged $30 per day for their impounded cars, on an uncovered Impound Lot, in an industrial area of North Memphis. When including debt service, the Downtown Memphis Commission Mobility Center loses approximately $2M per year. Get the picture? If not, there is one above.
First, when retrieving cars from the Impound Lot there are fees to the tow company and Impound Lot storage fees that must be paid. Collected by VMS, the Impound Lot operator, the tow company gets $225 up from $130 not long ago and perhaps additional fees if a winch was used when recovering the vehicle. VMS, as the Impound Lot operator gets $30 per day storage fee and charges an additional $2.93 per day for sales tax. The additional per day sales tax increase comes as result of VMS privatization.
So back to the previous section’s payday example, a 5 day stay in the Impound Lot will cost an individual on payday about $390. If they cannot afford it, their personal vehicle is headed to auction.
The 2018 WREG story, by April Thompson discusses Impound Lot full year business auction outcomes under MPD from 2015-17:
So, the Impound Lot is a storage and auction business weighing heavily on the transportation needs of the poor.
Again, the Impound Lot business was privatized near the end of the Strickland administration. A profitable City of Memphis business that has always been onerous, weighing on the poor. Based on a cursory review of multiple public financial documents, it is estimated that the Impound Lot is a $5M per year total business, leaving $3M in profit for tax coffers before privatization.
Post privatization and based on a review of the Impound Lot contract with VMS, a portion of those revenues have been privatized, resulting in an estimated $1.5M of the $3M going to the Illinois based VMS and out of Memphis (City of Memphis). It is also suspected that local elitist consultants will take down at least $500K recurring per year, paid by VMS for consulting services.
Kind of a sick analysis here. But before, City coffers benefitted from a sick City business now made worse with the City exporting those profits to an out of town VMS firm. Better would have been the City running a breakeven Impound Lot and giving the poor a break. Next would have been, keep the profits in tax coffers from an onerous public business and worst is exporting public profits from an onerous business that weighs on the poor, while then VMS potentially pays consulting fees to local punk elitists. All of this is before phase II contract implementation for dispatching.
There is an emerging pattern. Botched public work is heavily reported by the media and then massive contracts or privatization follows. After heavy media reporting regarding botched tree trimming, a massive spend resulted in a 5 yr. $228M MLGW tree trimming multi-contract award. The contracts can be shown to be 2x what other municipalities are paying for tree trimming (TJI). And privatization of the Impound Lot is another example.
So what’s next on privatization regarding transportation and poverty? I guess we will soon find out….
JustMy. MATA: Public Transporation and Poverty - https://www.justmymemphis.com/view-post/2467
