Towing Program Overhaul Urged : Reform: City officials call for increasing fees $31 and putting contracts out to bid. Garage owners say that would result in shoddy service.

Calling for an end to an “old-boy” system, Los Angeles city officials Monday recommended an overhaul of the program for towing impounded vehicles, including an additional $31 fee to raise more revenue.

The cost to owners of impounded vehicles might increase under the proposed system, part of a series of parking reforms intended to bring the city an extra $7.7 million a year, officials said. Competitive bidding by towing companies would lower costs, but the added fee would raise the charge above current levels.

The present towing system is a lucrative network of 18 private tow garages with city contracts, operating as virtual monopolies. Families can pass contracts from generation to generation. The city Police Commission, which awards the contracts, cannot cancel one unless it has evidence of major misconduct.

“Several of our police garage contracts have been held by the same company for 30 years,” Councilman Marvin Braude said at a news conference. “It’s time these contracts not be inherited privileges and that they be awarded through open, competitive bidding.”

The municipal towing system, the nation’s largest, came under scrutiny in 1991 when officials discovered that the private operators had never been audited and the city did not know how much profit the firms were making through towing and storage fees, which are charged to nearly 200,000 motorists a year.

The proposals were made by the city administrative office, which said it found the system in need of major reform.

It proposed that towing companies begin to bid competitively every five years for the contracts and to pay annual franchise fees to the city for the first time.

Under the current fee structure, set by the city, the towing companies charge a $69.50 towing fee and a storage fee of $13 a day for impounded cars.

The parking plan also proposes to cut the cost of impounding stolen vehicles by letting less-expensive city parking enforcement officers--not only police officers--do the work. The plan also suggests blocking the release of impounded vehicles with five or more parking tickets until those tickets are paid.

At a meeting of the council’s Public Safety Committee on Monday, members of the Official Police Garage Assn. said forcing the city to award towing contracts to the low bidder could result in shoddy service and uneven tow rates across the city.