PUBLIC SERVICE COMMISSION OF WEST VIRGINIA MORGANTOWN * * * * * * * * * and DOUGLAS BRADY, d/b/a/ * * * * * * * * * HEARING TRANSCRIPT

PUBLIC SERVICE COMMISSION OF WEST VIRGINIA MORGANTOWN * * * * * * * * * IN RE: DOUG'S TOWING, LLC * and DOUGLAS BRADY, d/b/a/ WESTOVER TOWING * Case No. * 0-0-MC-GI * * * * * * * * * HEARING TRANSCRIPT * * * * * * * * * BEFORE: MICHAEL ALBERT, Chairman ED STAATS, Commissioner JON MCKINNEY, Commissioner HEARING: Friday, June, 00 1:0 p.m. LOCATION: West Virginia University Erickson Alumni Center Fine Arts & Patterson Drive Morgantown, WV 0 Reporter: Resa Hall Any reproduction of this transcript is prohibited without authorization by the certifying agency. () -0

1 1 1 1 1 0 1 A P P E A R A N C E S CHARLES COVERT, ESQUIRE 1 Brooks Street Charleston, WV Counsel for the PSC ANDREW MEEK, ESQUIRE 1 High Street Morgantown, WV 0 Counsel for Doug's Towing EDWARD R. KOHOUT, ESQUIRE Standard Avenue Morgantown, WV 0 Counsel for Doug's Towing () -0

INDEX TO WITNESSES 1 1 1 1 1 0 1 DISCUSSION AMONG PARTIES - STATEMENT By Tom Arnold - QUESTIONS By the Commissioners - STATEMENT By Michael Pifer - QUESTIONS By the Commissioners - STATEMENT By Grace Gmeindl - STATEMENT By Bill Pavone - STATEMENT By Darryl Summers 0 - QUESTIONS By the Commissioners - DISCUSSION AMONG PARTIES - WITNESS: Stephen Kaz DIRECT EXAMINATION By Attorney Covert - EXAMINATION By the Commissioners - () -0

CROSS EXAMINATION INDEX TO WITNESSES (continued) By Attorney Meek - RE-EXAMINATION By the Commissioners - WITNESS: Douglas Brady DIRECT EXAMINATION By Attorney Meek - EXAMINATION By the Commissioners - 1 DISCUSSION AMONG PARTIES - CERTIFICATE 1 1 1 1 1 0 1 () -0

E X H I B I T S Number Description PSC-1 Utilities Division Final Page Offered Recommendation PSC- Third-Party Towing Program Contracts 0 PSC- PSC Regulations, Article 1 1 1 1 1 0 1 () -0

P R O C E E D I N G S -------------------------------------------------------- 1 1 1 1 1 0 1 This is not like a funeral or a wedding where we're reserving front rows for immediate family. If anyone wants to move up, feel free. There's plenty of seats. Good afternoon. My name is Mike Albert. I'm Chairman of the Public Service Commission. To my right is Commissioner Jon McKinney. To my left is Commissioner Ed Staats. We are here today for a hearing in PSC Case Number 0-0-MC-GI. It's a general investigation of third-party towing and invoicing practices of Doug's Towing, LLC. Before we begin, I would request if you have a cell phone, please put it either on mute, vibrate or off, and we will begin by taking appearances of the parties and their attorneys. Following appearances, we have distributed a sign-up sheet. If you care to speak, we will ask you to sign the sign-up sheet, and we will call people up to speak. With that, let's go ahead and take the appearances of the parties. You want to start? ATTORNEY MEEK: Mr. Chairman, my name is Andrew Meek. I'm Co-Counsel for Doug's Towing, along with Mr. Ed Kohout. () -0

Staff? ATTORNEY COVERT: Mr. Chairman, Commissioners, I am Charles Covert, here today as the staff attorney. With me are two members of the staff of the Public Service Commission, Steve Kaz and Jim Boggess. 1 1 1 1 1 0 1 All right. Are there any other parties here by counsel or who have petitioned and signed the register? We're going to begin the public comment portion of the hearing. I have the list of those people who have indicated they want the opportunity to speak. When I call your name, please go to the lectern, give me your name. If there's anything other than common spelling of it, please spell it for the court reporter. Give me your address and then you may make your statement. We will not swear the public witnesses. I don't think it's necessary. And I'll just take their names in the way they appear on the sheets that I've been handed. It looks like the first is Edward Kohout. ATTORNEY KOHOUT: Mr. Chairman, I'm Counsel from the Respondent, so I don't ---. () -0

1 1 1 1 1 0 1 You won't be making a public statement? ATTORNEY KOHOUT: No. Thank you, sir. Tom Arnold? MR. ARNOLD: Thank you, Mr. Chairman. My name is Tom Arnold. I'm executive director of Morgantown Parking Authority in the City of Morgantown. The majority of our business being parking, we utilize towing companies a lot, not as much as we used to, but we do have occasion that we utilize towing. And in the City of Morgantown, towing companies is a very competitive market, and we've found a couple of reputable firms in our area that take care of our customers the needs of our customers in a situation that's not pleasant to begin with when you tow someone's vehicle. To outline, the Parking Authority does not have contracts for third-party tows. We do not use one firm exclusively. Our third-party tows are actually executed by our enforcement officers. They're charged with making the decision to have a vehicle towed. If it's on the street, public right-of-way, we must contact the police department. At that time, it goes to a rotation list. If it's any one of our lots, then we have () -0

the rights to do that. We do use Doug's Towing. We've used Doug's Towing for the last four years and really had no problems with Doug's Towing. The one thing that I would like to say is how well they treat our customers that have been towed, and normally a tow situation is someone's blocking a right-of-way in a lot or they're parked in a no parking zone, a bad meter that creates a problem for traffic and/or we have a boot program for 1 1 1 1 1 0 1 outstanding payments and they're given hours to answer that boot, and if they have not, then we remove the boot and have the car removed to impound. And I've never said Doug's is not exclusive to that service, but they have done very well for us. They have been consistently the most inexpensive tow service that we've used, and consistently they take care of customers many times, late night customers. Many times, late night customers, they will come pick them up in downtown, take them to their impounded car to let them pay the bill. So for that, I have no problems with Doug's, nor do I see there are any problems when it comes to when they're doing with Morgantown Parking Authority. Just out of curiosity, the boots are put on by the Morgantown Parking Authority? () -0

MR. ARNOLD: Yes, sir. And you talk about they're the least expensive. They don't bill you? MR. ARNOLD: No, sir, they do not. You don't pay them anything for this service, I'm saying? MR. ARNOLD: No. But what we like to do is we'll 1 1 1 1 1 0 1 have someone that's going to be charged when they come in and say, okay, I've been towed, how much are they going to charge us? And their fee has been consistently the lowest, as I've said. They are not exclusive. They don't do all of our towing. They do a lot of our towing, because we know from day to day, week to week, year to year how much they're going to charge that person. So when they come in, they're upset because their car was moved anyway, the more information you can give them to understand what it takes to get out of that situation, the more they appreciate that. We agree with that in general. Thank () -0

you for your comments. MR. ARNOLD: Thank you. Michael Pifer? MR. PIFER: 1 1 1 1 1 0 1 Hello. Thank you for letting us speak. My name is Michael Pifer, and I own a towing company in West Virginia, and I am the president of the West Virginia Towing and Recovery Association. I'm not here just to talk about the situation. I'm here to talk about the Towing Association and the whole state. And the investigation for invoices started back in December of '0. The Towing Association has hired Kauffelt and Kauffelt to represent us, and he sent information in telling you what we think needs to be on the invoices. The situation here in Morgantown should stay in Morgantown. Don't penalize the whole State of West Virginia for an overpopulated, not enough room for students, and it's a shame that we have to have a meeting like this to get something straightened. And an investigation that started in 00, and we haven't heard of anything from the Commission. Now, the Staff has done its job. And we thought, as towers in the State of West Virginia, that () -0

when Mr. Covert left the throne, the iron wall where we 1 1 1 1 1 0 1 have never been able to get anything done, we thought we could get something done. We've had numerous meetings with Mr. Covert. Mr. Boggess has been there. Mr. Kaz has been there. Mr. Byrd has set them up. We've had Senator Hunter help us. We've been down there at least six meetings, and I think the Staff and the towers of West Virginia is getting a good feeling for each other, but we're not getting anything going. We've got the rates that we want introduced. The Staff has looked at it, and they've used their opinion about the rates. We haven't heard nothing at all. So what I'm trying to say is, simple the Staff could have helped Doug become more professional and bring the towing up to where it needs to be. We're not getting no support from the Commission, because we need changes. We've had towing companies that is starving to death, and we need rate relief. We need to know what needs to be on our invoices. And while I'm speaking, I would like for the Commissioners to understand that they have got enough stuff on the invoices that we are required to have that we would have to carry a secretary with us; okay? And I personally have told Mr. Covert and Mr. Boggess () -0

that we, the Towing Association, will set up a meeting. We'll set up classes. We'll set up a seminar to show them what information we give and when we get the call, when we get finished with the call, and we bill it. And I'm a firm believer that everybody 1 1 1 1 1 0 1 should go by their tariffs; okay? But when your tariffs is over 0 years old, cannot get no attention, and I am the only towing company in the State of West Virginia that has had an audit and went to --- Mr. Kaz was there, Mr. Boggess, and I have got good rates. But the other people in this state is starving to death. And one other incident, I do want to let you know that we've had some people come down and introduce a bill in the legislature this year that pertained just to Morgantown, and I don't think it's fair. We need to be heard. We know we need to be heard and we need some attention on stuff that is in the works at the Public Service Commission. And I didn't want to sound like I'm preaching, but after being told and told and told and nothing comes of it, we're getting tired of it. Thank you. And if you have any questions, I'll answer them. Yes. Actually, Mr. Pifer, your association, to what extent do you police the activities () -0

of your members? Do you do anything about customer complaints? MR. PIFER: 1 1 1 1 1 0 1 We at the Towing Association would like to set up some kind of advisory board where, when the staff is having problems, understanding what's going on with the towing, we can have the advisory board to help them in the direction and be in between the tower and the Staff. As far as us litigating anything, no, we do not. We set up classes and we try to let the members of our association get their employees more professional. And the more professional they get, the better we respect the public and understand the public. Well, I think we both want the same thing then. MR. PIFER: Yes. Thank you, sir. I appreciate it. I'm not sure, Grendel, Griendel (phonetic)? COMMISSIONER STAATS: Excuse me. Mike, how many other members of your association have filed tariff cases like you've got? () -0

MR. PIFER: The Staff will do an expedited tariff thing, but the rate that they're going on is 1, and 1 1 1 1 1 1 0 1 whatever the highest was in ', they won't let towing go up any, except for me. COMMISSIONER STAATS: And that's why I asked you, how many others do you know of that filed a rate case like you did? Because yours is the only one I have ever seen. MR. PIFER: I'm the only one. After about $,000, I finally got a rate increase. And a towing company cannot afford that. COMMISSIONER STAATS: Do you have any ideas on how using the methodology or something simple that was used in your case, which is basically a cost-driven methodology, do you have any ideas or suggestions on how that methodology could be streamlined, still using a pure entity costbased approach, that would make it more expedient and cheap for the towers? MR. PIFER: The questions you're answering is what Mr. Covert and us have been meeting about, that we want to take a cost basis, and they wouldn't say me, because () -0

1 1 1 1 1 0 1 1 they didn't want to single me out, but take a cost basis, put an inflation factor to them and come up with what it should be. And the Staff has done that and come up with a base that they think that the rate needs to be. In other words, do you know what the statewide rate is? Well, if you want to set up a towing company ---. COMMISSIONER STAATS: I can't tell you what the statewide rate is for this or water either. MR. PIFER: Well, if either one of you gentlemen opened up a towing company today and you called down and tell them you're going to open up, and you get all the paperwork and stuff, you have to tow cars for $. And you get a fuel surcharge. But I mean, we've been put on the back burner so bad, I mean, right now, I think the association recommends for $0-some. The Staff come back with a recommendation of $0-some. And that antiquated down since this fuel surcharge. And you haven't been keeping up on fuel surcharge. And I hate to keep on talking about this report, but he just --- I don't know if he had a thorn in his side for everybody that was towing, but we're hopeful with a new Commission and Mr. Covert and Mr. Kaz, and Paul Stewart is going to be leaving. If we () -0

1 1 1 1 1 0 1 1 can get the towing industry in this state up to where it needs to be where we can become professionals and pay employees and have equipment to do these services and do it right --- and yes, people, it is going to cost you when you park illegally and you have to be towed. And that's a fact. It's going to cost. Everything else does, too. COMMISSIONER STAATS: So do I understand that the association and the Staff have reached some kind of agreement on what the methodology to be used to determine rates should be? MR. PIFER: As far as I know, they've come up with a number --- we come up with a number, they come up with a number. They did theirs a little different than ours, but Mr. Covert, I guess, can maybe answer that. But yeah, they have come up with a recommended --- what they recommended and what we recommended. COMMISSIONER STAATS: Okay. Let me ask you, do you agree with their methodology that they used to determine that number? Does the Association agree with that methodology? MR. PIFER: We agree with it except for what we () -0

1 1 1 1 1 0 1 1 think we should have and what they need to. They've come a long way. And for me, I have not been privileged enough to look and see what data they used to come up with their $0. COMMISSIONER STAATS: Okay. MR. PIFER: I haven't been --- but they're doing a lot better than what it was. COMMISSIONER STAATS: Well, they're doing better because you've come closer to the number. MR. PIFER: Yeah. COMMISSIONER STAATS: What I'm after ---. MR. PIFER: I've never seen what my methodology was. COMMISSIONER STAATS: That's what I'm after. MR. PIFER: I've never seen what theirs was. COMMISSIONER STAATS: So is there any reason why you () -0

1 1 1 1 1 0 1 1 shouldn't solve the differences in the methodology to get consistency of application from the Towing Association? Is there any reason that can't be done? If I can get an answer to that. ATTORNEY COVERT: In response to the Commission, I would think that the point man on that really is Paul Stewart. I've chaired the meeting to move the discussion along, but that's --- see, I'm not a part of the decision-making process. Wait. You need to identify yourself so the court reporter who is taking this down knows who you are. ATTORNEY COVERT: I'm Charles Covert. Mike Fletcher, Paul Stewart, I know worked on this problem continually. It's not a problem --- to my way of looking at it, it's just plugging in a number that somehow became a complex problem. I think that Paul's departure, I think that that probably received more ---. COMMISSIONER STAATS: Okay. I thought you could help me here. I'm trying to understand the answer to my own question. You had a methodology, or somebody did. It () -0

equals some result. The Towing Association has a 0 1 1 1 1 1 0 1 methodology that they developed. It equals some result. I'm not so interested right now in the result as I am in the methodology, because that methodology will be used for years to come. That's what I'm after, trying to find out, is there a meeting ground between the two along methodology? MR. PIFER: We were this far apart (indicating). Now we're this far apart (indicating). But we have to have a meeting. And it's in your guys' hands, if I'm not mistaken, now, Mr. Covert. Because Mr. Fletcher is the one that --- Michael Fletcher --- I might be saying the name wrong --- is the one who was doing it, and ---. ATTORNEY COVERT: He had it on the agenda, on the decision, as to the methodology. Sure. Go ahead. MR. KAZ: I'm Steven Kaz. I think what Mr. Pifer was referring to is Case Number 0--NC-GI, a general investigation initiated by the Commission. The Towing Association has made a recommendation to the Commission as to what rates that they believe they should be allowed () -0

to charge, and Staff has done the same. Staff details its methodology to elaborate rates in a memorandum of Michael L. Fletcher dated February 1th, 00. And 1 1 1 1 1 1 0 1 essentially what we tried to do in that was to start with cost-based rates, such as like, Mr. Pifer, with your rate case, and to apply an inflation to those. COMMISSIONER STAATS: Okay. MR. KAZ: And hopefully that methodology will provide the original rates that you would be able to update. COMMISSIONER STAATS: Now, do you agree with that methodology that is in that memorandum? Does the Towing Association agree with it? MR. PIFER: I agree with them using the inflation factor. The thing that we wanted to try to do was the old state rate that we had said three-quarter ton pickup, one-ton pickup, that kind of technology. You don't buy a three-quarter ton pickup anymore. You have a GVW and you have --- and they've changed it, and the DOT come up with classification, class one, class two, class three, all the way to class eight, which is a tractor-trailer, and () -0

then a class nine would be something that would need a permit. 1 1 1 1 1 0 1 And we wanted to change it to where all of that criteria --- and Mr. Fletcher, it's hard for him to do that, because he doesn't know what a,000 GVW vehicle is, which would be like an SUV, and,001 would be a full one-ton, dual wheel, right on up through. And with our help and us sitting down, I think we can come together. But I think they come back to the Association going, how do we come to this? We want something every year or every two years where we can get a little bump, you know what I mean, and not have to go do this ---. COMMISSIONER STAATS: You want that as part of the methodology? MR. PIFER: Yes. And Pifer's, me, myself, I went and paid the bucks and got my own rate. I am here for every tower in the State of West Virginia. And I appreciate your concern. I appreciate your all's concern, but I think we've jumped over a big fence here today. COMMISSIONER STAATS: Well, okay. Well, we've got this page and we've got a memorandum from the Staff that says one () -0

1 1 1 1 1 0 1 thing with which you all don t entirely agree, but you're very close, and it would make the classification adjustments with that methodology, and then set up some mechanism for it to go forward ---. MR. PIFER: That's what we want. You said exactly what we want. COMMISSIONER STAATS: So is there any reason that you should want us to resolve those differences or do you want to resolve them yourselves? I would suggest to you that you would be better off to resolve them yourselves. MR. PIFER: Well, that would be up to Mr. Covert. ATTORNEY COVERT: With all due respect, it's not up to Mr. Covert. MR. PIFER: Well, I mean, you're the one that sat at the meeting. ATTORNEY COVERT: Well, I have chaired some meetings as a board member. But this process is moving along. MR. PIFER: See, that's what they're into. They're () -0

1 1 1 1 1 0 1 saying it's you guys, and you're telling them it's them. Let's stop just a second, Mr. Pifer. While I fully appreciate the comments you've made and the comments of your association, and I understand you've joined at issue here that we're going to need to take a look at and try to move along, the purpose of this hearing today relates to the persistent pattern of complaints that we've received about Doug's Towing and his practices, and that's why we're here. And while we've allowed you to talk about the Towing Association generally and your problems, and we will address those as well, what I'd like to do is move forward with the proceeding here today. And I do thank you for your comments. They're well taken and we will focus on them, sir. MR. PIFER: Thank you very much. All right. MR. PIFER: And I come from Parkersburg just to do this. I understand. () -0

MR. PIFER: Thank you. 1 1 1 1 1 0 1 Ms., is it Gmeindl? And you might want to spell your name for the court reporter. MS. GMEINDL: Yes. My name is Grace Gmeindl, and it's spelled G-M, like General Motors, E-I-N as in Nancy, D as in David, L. Just as you wrote it, actually. MS. GMEINDL: Yes. I'm used to spelling it that way. Thank you. I don't know if this is the proper forum. I'm a librarian at the Health Sciences Library, so this is not my usual audience, but I did have a brief experience with Doug's Towing. It's been a while back. But I was coming down from the end of the day, workday, to the employee parking lot. My car would not start, and I called my Honda Roadside Assistance number, and they sent Doug's Towing. I will say I didn't have to wait very long, but they came, and he looked at the car and he was there for a while and he said, there's nothing I can do for you. He said there was nothing he could do for me to () -0

get the car started. He disabled my horn and sort of 1 1 1 1 1 0 1 left me there. From this point it was getting dark, and it might have been in the winter. I don't know. So he left me there and I started calling friends. It might have been a Friday night. I couldn't reach anybody for quite a while, and that parking lot is very dark. So I went back up to my office and tried to call, again, some people, and I went, got one of the Mountain Lion buses to get home, left my car in the parking lot. And later that night, around ten o'clock, a friend came and wasn't able to start the car. And at that point they said, well, he's burned up your switch, and I have the switch here, said he'll have to go up to Mount Morris Honda. They're the only one who would have this switch. And that turned out to be true. So the next morning I had to find a ride up to Mount Morris Honda, got the part, and this person, who happened to be a mechanic who was visiting from Seattle, got the car started. And I complained to Honda, maybe two times, never heard anything back from them. So that's just my experience. I thought I would share it with you. Thank you, ma'am. MS. GMEINDL: You're welcome. () -0

Pavone? Is it Bill Pavone? MR. PAVONE: Commissioner, my name is Bill Pavone, P-A-V, as in Victor, O-N-E. Something has to be done, not only with Doug's Towing, but general towing in this area. And my personal experience is that I was in a 1 1 1 1 1 0 1 restaurant eating, and we have two or three of these tow guys driving around. They had some kind of contract. The owners of the property grabbed the car and take off. Well, they took off with my car. I didn't know if somebody stole it or what, so I drove up to the police station in the City, Morgantown, and they said they didn't have any report. So I didn't know what to do, and I said, well, was the car stolen? About 1 minutes later, Doug's Towing called and said they had my car. Now, I lived in Morgantown now. I don't know if this is on the border, but I want to take care of Morgantown first, Mon County second and the State of West Virginia third. And I only say that because I was born and raised in Morgantown, and I don't want somebody from Pennsylvania coming down there and telling us what to do. We got enough problems we've got to solve ourselves. () -0

1 1 1 1 1 0 1 Well, to make a long story short, Doug takes my car off the truck. The guy that's there says, we got there just in time. I said, just in time? He says, yeah. He says, we might have needed a dolly for that thing. I said, dolly for what? He says, moving it up. We're going to store it. And I says, well, what does that have to do with anything? They lost $0. Now, they towed that car from down at the wharf. Excuse me. My personal opinion is we shouldn't have people coming from another city and taking our cars and taking them back to that city. Next thing, they'll be coming down from Nebraska, taking our cars to Nebraska. Well, anyhow, the guy said it was $10. Well, I just measured it about 1 minutes ago. It's 1. miles is how far they towed that car. $10. That's over $0 a mile. I just think it's ludicrous. It may be cruel to charge those kind of rates. I understand --- I'm in business myself. You have to make money. But those rates are absolutely absurd. So I says, well --- it was $10 cash. So I said, well, I'll talk to Doug. This was on a Friday. I'll talk to Doug Monday. I called up at the office. I voiced my complaint to whoever answered the phone. I don't even remember, because this is maybe May of 00, but they said Doug will be calling back. I'm () -0

still waiting. If they don't call pretty soon, they'll 1 1 1 1 1 0 1 probably have to come see me in the graveyards. Anyhow, this Commission is the first line of defense against this. And when people come to you, you have to do something about it. Now, I don't know what the problem is. But I just got back from Philadelphia yesterday. I happened to be near enough to look at this cab. The cab has a rate right on it. $.0 for the first passenger, 0 cents a minute while idle, 0 cents per quarter of a mile, no more than $ anyplace in Philadelphia. I don t know what's so hard about that. You know, you got to write these tariffs. You need one of those lawyers from Philadelphia. You can probably figure it out. I'm just asking you, please, please --- you know, we have people coming from Morgantown, football Saturdays. They may tow 0 cars total. Maybe they should be towed. But this makes a bad image for people coming from Charleston. First thing you know, costs them $00. That's not something I think we should be part of, and I think you guys should do something about it. Thank you for your attention. Thank you for your comments, Mr. () -0

Pavone. Do you have Cross Examination? Those are the 0 1 1 1 1 1 0 1 only people that show up on this list as having indicated they want to make a public statement. MR. SUMMERS: Sir, could I make a statement? Yes. Please state your name and spell it for the court reporter. MR. SUMMERS: May name is Darryl Summers, S-U-M-M-E-R-S. I reside here in Morgantown. I have a towing company in Morgantown. Been here for 0 years, a second generation towing company. I've seen the university grow. I've seen the problems that we've had here in Morgantown. There is definitely a problem with towing. There's no doubt about it. They build these apartments. The stadium over here holds,000 people, built 1,00 parking spaces. That means ten people per car. They built the football stadium. The only parking over there is the hospital parking. So there is definitely a problem in Morgantown. The apartments are really crowded. They build just enough to park their cars, and that's it. I believe the problem is the city and the university's problem. They're not building enough () -0

1 1 1 1 1 0 1 1 --- I towed cars in the '0s for my father, same problem. The university's towing right and left. The biggest problem I see with the towing here in Morgantown is that, like I've stated, there is not enough parking. But you can't punish a tower for towing the cars that the landlord or the business would like to have removed. We do something on this side of town, my shop, so we come out here right beside the football stadium. We tow from McDonald's. McDonald's calls us during the football game, halftime, no one in their restaurant, and they've got 1, 0 cars sitting there. They don't want all the beer bottles, all the paper, all the trash that's left behind. There's parking complexes we tow for. We tow out of handicapped spots. They come in there, :00 in the middle of the night, the students or whatever, they went out to party. They pull in, leave their cars in the middle of the road. We try to do it a different way than the other towing companies do. I mean, we give out T-shirts to students that get towed, just to kind of break the ice, that says, you've been hooked by Summers. They're blue and gold, West Virginia colors. This year, a little girl comes in to get her Neon, and I said, ma'am, what size T-shirt do you wear? She said, I wear small. I said, well, I'll give you one. And she said, do you get any () -0

other colors? I said, no, these are West Virginia 1 1 1 1 1 0 1 colors. She said, I've already got three. So if Mom is paying these towing bills, and they just hand that credit card out, I don't know what the solution is. I know one thing. If they keep on messing with most of the tow invoices --- they're too complicated for our drivers to fill out. If you look at one, they want the time you got the call, the time you left, the time you showed up to the vehicle, the time you left the vehicle, the time you got back to the shop, license number, VIN number, phone number, address of the persons having the car towed. If you own a place here, would you want me giving your phone number out to some rowdy student that you towed his car away? We had information, we had contracts with these places, and this is probably less than ten percent of our business but probably 0 percent of our headaches. I don't like towing away. When I was a student here, my father took my car, purchased a new apartment here in Morgantown, and you try to do it professionally, and most of us do. And that's why I think you need to really look seriously at how to get it to where the bill books are more easier to fill out, time you got the call, time you got back. I know I've work with the Commissioners on whether you use dollies and () -0

whether you don't. Most of these cars, we don't have keys. I mean, once in a while they'll leave keys in them, but most of them they don't have keys. You don't want to unlock the cars, because you don't want to take 1 1 1 1 1 0 1 the responsibility, so you do have to use dollies, you do have to use wheel lifts, and you do have to have skilled employees to do that. But these skilled employees are not book smart as far as filling out invoices. So the simpler we can do that, the better it would be for our industry. Thank you, sir. MR. SUMMERS: Thank you. I appreciate your comments. Commissioner? COMMISSIONER MCKINNEY: Let me ask you a quick question. You say that you have to use dollies on most of the cars because you don't have keys. Is that the only reason you have to use them? MR. SUMMERS: No. The reason we do it is because most cars are front wheel drive. Most cars are pulled () -0

in. Most cars have emergency brakes and they're on the rear wheels. So if we tow this --- if you raise that 1 1 1 1 1 0 1 vehicle up and you move that car, now you've put pressure against that parking pin, and there's a good chance you can damage it. The safest way is not to have any of the car rolling on the ground. You put your dollies under one end or the other, pick up the other and strap it down and bring it in. Now, the only other way is if you have the key, you can put it in neutral and move the car. You can put it on a rollback. But or percent, we use dollies because there's always that thing that --- well, you've done this to my transmission, you've done that, and this way you pull it completely off the ground. And no one's happy to get their cars towed. I'd rather go out and start your car if it was broke down or out of gas or something like that. Then I wouldn't tow you illegal, because I know it's not a happy --- no one wants to have their car towed unwillingly. And whether it's a DUI or whether it's an illegal park doesn't matter. We treat them all the same. I mean, there's things can probably be done. You know, credit cards can be taken. Well, you lost the credit cards. I do not run strictly on cash, because it's easier for me to hold a credit card with my business. I think that would be a prime example. () -0

1 1 1 1 1 0 1 I'd still like to see the bill book say rates upon request and post your rates in your place of business, because if I had to spell out my rates --- I'm one of the last companies to have a rate increase before the deregulation. My rates are three pages long. I'd have at least four pages to give you an invoice, and then you wouldn't understand them, because you wouldn't understand you've got daytime rates, you've got nighttime rates, you've got after hours, you've got your holidays, and I've worked with the Commission with this. I've been president, vice president of the Towing Association, and I do want a professional business. That's the reason why I've with the Towing Association, is to put on classes to make sure we don't damage cars and how to do them properly. Mr. Summers, do you believe that you --- I realize that you don't provide your rates to the customers, people that you tow, third-party tows. Do you feel you apply your rates correctly when you ---? MR. SUMMERS: Yes. Have you ever been brought before this Commission in complaint cases? () -0

MR. SUMMERS: I have never been brought before the 1 1 1 1 1 0 1 Commission. I've had, I think, one or two that was filed with the Commissioners, and it was --- and that's where I got with them and I explained to them why we charged dollies, and they want to know --- see, a lot of your rates, if police request them, the police --- they don't know how the cards are getting handled. So I've had folks from AAA, folks from the manufacturers saying why this car needs to be towed on dollies. I understand that. My question is, going to the fact that you correctly apply your tariffs and you get relatively few disputes with the customers --- is that correct? MR. SUMMERS: That's correct. All right. So thank you. Are there any other people who want to make a comment? All right. If not, we'll proceed with the hearing. Staff, it's a general investigation. I guess you will start with a witness. ATTORNEY COVERT: We'll call Stephen Kaz, please. Mr. () -0

1 1 1 1 1 0 1 Chairman, while Mr. Kaz is approaching the witness stand, let me just make a brief statement, an overview of where we think we are and where we think the evidence is going. Please do. ATTORNEY COVERT: By your Order, February, 00, we were directed to do a comprehensive review of Doug's third-party towing and invoicing process. Mr. Kaz and Mr. Boggess did that. They filed a memorandum with the Commission dated April 1 of 00, which paints a picture of poor performance, disregard of rules, disregard of tariffs, lack of cooperation with the Commission, and other problems. Since that period of time, our evidence will show that Doug's has been in contact, communication with both the two gentlemen with me today, Mr. Boggess and Mr. Kaz. They have resolved numerous cases by way of making voluntary refunds. They have submitted an invoice which has received general approval of our witness. Their track record since March has been much better and continues to improve. And I think that's what our evidence will show. I just want to give you some idea of where we were going with our evidence. () -0

All right. Thank you, sir. 1 1 1 1 1 0 1 -------------------------------------------------------- STEVEN M. KAZ, HAVING FIRST BEEN DULY SWORN, TESTIFIED AS FOLLOWS: -------------------------------------------------------- DIRECT EXAMINATION BY ATTORNEY COVERT: Q. First, for the record, please state your name and place of employment. A. My name is Stephen Kaz, K-A-Z, and I work at the Public Service Commission of West Virginia in the Utilities Division. Q. And what are your titles and responsibilities with the Public Service Commission? A. I'm a utilities analyst supervisor, and basically I help process cases having to do with motor carriers, solid waste and formal complaints, as well as some other duties as assigned. Q. How long have you been doing this title for, Mr. Kaz? A. I've been the supervisor of the section for, I believe, two years, but I've worked with the Commission for about 1 years, 1 years. Q. As a result of the Commission's Order of February th, 00, were you asked to undertake any () -0

function? 1 1 1 1 1 0 1 A. Yes. Myself and Mr. Boggess physically went to Doug's office and reviewed his invoices, his record keeping practices, as well as observing some of his third-party towing practices. Q. Mr. Boggess is to my right, sitting here at the counsel table today? A. Yes, he is. Q. When was your visit to Doug's Towing? A. I believe it was in March of 00. I'm not sure of the specific days. Q. As I understand it, you and Mr. Boggess spent about three days there; is that correct? A. That's correct. Q. And when you were up there, what exactly did you do? A. We reviewed a random sampling of invoices to see if they complied with the Commission's Rule..e, which is rules and regulations applicable to wrecker companies, as well as visiting two storage lots that Doug's employs in its operations. Q. Did you have a general opportunity to view his business, incoming calls, how they process non-consent tows, matters of that nature? A. Yes. () -0

Q. What kind of cooperation did you receive from Doug's Towing? A. After explaining why we were there and what we would need to see, Doug and Cathy Brady both were very cooperative. Q. And in fact, as I understand it, their Counsel appeared briefly at the start of that investigation; is that correct? A. Yes, he did, and we explained to him also what 0 1 1 1 1 1 0 1 we were there to do, though we had contacted Doug before that and let him know the dates that we would be arriving and when we would be working. Q. Okay. So when you showed up, it wasn't a surprise? A. No, it wasn't. I didn't want it to sound that way. Q. What was your first impression after briefly reviewing the records and the process of what you saw at the commencement of your investigation? A. Overall, the invoices were very poorly filled out, if filled out at all. Essentially what we checked for was to see if the invoices met with the Commission's rules and regulations as well as whether they were properly and thoroughly filled out by Doug's and employees of Doug's. () -0

Q. You walk into Doug's and your start asking for records. How did you receive the invoices that you reviewed? A. Essentially what we decided to look at was a 1 1 1 1 1 1 0 1 random sample of the fourth quarter of 00 and the first quarter of 00, since that's when many of the complaints that we received were filed. Q. When you got there, did Doug have a third-party tow receipts and records separated from his other business? A. No. They proceeded to separate the invoices for us for that time period. There was also a time period in which the accountant that was doing the tax returns for the year had many of the invoices in order to do the tax work, since it was March and April's tax time. Q. So is it a fair statement to say that you and Mr. Boggess felt that you had a pretty fair representation of the third-party tow bills and receipt documents that you needed for your investigation? A. Yes. Q. You have filed a memorandum with the Commission that I alluded to earlier dated April 1th, 00, which is part of the record. Do you have that document in front of you, the memorandum? A. April 1st, 00? () -0

Q. The one I have is dated April th, but that 1 1 1 1 1 0 1 might be a typo. I'm looking at the document which lists several criteria you used when you compiled your data. Is that the document you have in front of you? Well, the Rick Allen memo is dated April 1st. His memo is dated April 1th. That may be the confusion. BY ATTORNEY COVERT: Q. That's where you're looking? A. Okay. Q. I'm looking for Mr. Allen. A. Yeah. Actually, the one I have has the wrong date on it. There was a confusion in the filing of that memo. Q. Now, you have several items in your memorandum, though, appearing in bold print; correct? A. That's correct. Q. And where did you get those items that you have in bold print? A. From Rule..e of the Commission's rules and regulations applicable to wrecker companies. Q. Those are the standards you used when you reviewed the invoices? A. Those are essentially the Commission's rules of () -0

what must be included on third-party invoices. Q. Now, realizing some of the standards are probably more important than others, would you describe for me what you found and what you think the most grievous error that you discovered through your investigation? A. Well, as we said before, we sampled 1 1 1 1 1 0 1 approximately 0 invoices, and of those invoices did not contain sufficient information for us to calculate the proper charges using their approved tariff. Essentially, what they would have --- mostly what they would have not included would have been explanation of what happened. There could have just been a number, like $0, that's the charge, or normally what it was is there did not contain a starting and ending time to the tow. Other than that, that was the biggest thing that we found that would stop us from recalculating the tow charges. Otherwise, as you look through the memorandum, there were things missing such as the type of vehicles that were towed, itemization of the charges. There were just many different things were missing, were not included on the invoice. Q. And all those things were missing, those were items currently required by Commission rules; is that correct? () -0

A. Yes. Q. Now, did you do some review of the actual mathematical calculations, also, of the invoices? A. Yes. On the invoices that we were able to calculate charges, which was approximately, I guess it 1 1 1 1 1 0 1 was of the invoices, we only matched their charges two times. And Doug's charges exceeded Staff's calculated charges 1 times, and Doug actually charged lower than what Staff would have charged times. Q. So in trying to apply the rates, they overcharged, on your review, 1 consumers; is that correct? A. Yes, and he undercharged. Q. And did that suggest anything to you as to the way he applied that tariff, calculated his bills? A. It suggests that he was very haphazard and careless in calculating bills, and whether that was the office people or the drivers --- I think it was probably more a combination of both. Q. Were you there long enough to discover any control factors or how the process actually worked, the invoice getting from the driver to the office to the consumer? A. Yeah. Essentially the drivers fill out the invoice. And what we suggested, and also what they have () -0

1 1 1 1 1 0 1 brought out themselves, Doug's, that is, is that someone in the office needs to check the invoices when the drivers drop them off to make sure that they're properly filled out. And in our conversations since our examination, Doug's has indicated that they've done that. They've met with their employees and stressed the importance of properly filling out an invoice, as well as going over the invoices with them to teach them how to fill them out. Q. And this was numerous conversations I've had with their counsel. Have you had conversations with Doug's since your visit up there in March? A. I'm sure we probably have. I spoke to Kathy Brady last week regarding their proposed invoice, which I believe substantially complied with all the Commission's rules. She had called to check on that before sending them off to the printer so they could use those. Q. So she redrafted her invoice consistent with the rules and submitted that to you? A. Yes. And ironically, while we were there, the invoices that they were using at the time did not meet the Commission's rules, and they also had invoices that they did not use that basically complied with the Commission's rules, and I believe that's what they're using now. So they were there, but through some unknown () -0

reason, they were not being used. 1 1 1 1 1 0 1 Q. You have a general feel for the numerous number of complaints that have been pending against Doug's in the past? A. Yes, I do. Q. And it's your understanding that those have been satisfied or resolved by payment of refund checks; is that correct? A. Yes, they have, as far as I know. And we have not gotten any new complaints since, I believe, a case was brought on March th. And any case that's not been resolved, Doug's indicated in them that he is willing to resolve those by writing the refund checks. Q. Now, in your memorandum which you filed and made three recommendations, one was that they use tow invoices that comply with our rules. From what you have seen and based on your review of the records and watching their compliance, do you believe they are beginning to do that correctly? A. Yes, I do. Q. Your second one was that they would train their employees to how to fill out those invoices. Have you had any conversation or do you have an opinion of whether they've attempted to do that? A. Yes. They have represented to Staff that they () -0

have had training sessions and meetings with staff to fill out the invoices. 1 1 1 1 1 0 1 Q. And based on your investigation, there were some concerns about storage facilities in Clarksburg and Fairmont within the rules. And did you have occasion to revisit those facilities or have a discussion with Doug about that? A. We have not, but I believe Doug's is trying to address those concerns. We've not revisited them again. And we spoke earlier before today's hearing in that we're under the impression that Fairmont has an ordinance that does not allow for storage of vehicles outside a place of business, such as a wrecker yard. And Doug had proposed that they be allowed to store the wrecked vehicles or towed vehicles inside while applying the outside storage rate, and we thought at this time that would be a pretty reasonable compromise as long as the other requirements were met. Q. So given your professional experience with the Public Service Commission, the work you've done, the continuing contact you've had with Brady and watching the records, do you have an opinion as to whether Brady is improving the operation of their business consistent with the rules of the Public Service Commission? A. I believe they are improving and are making an () -0

ongoing effort and have made an effort since then. The only other recommendation I would like to make is that the Commission or Staff be able to reserve the right to reopen this case should past practices of ignoring Commission orders and haphazardly charging rates reemerge. ATTORNEY COVERT: Mark that Exhibit One. BY ATTORNEY COVERT: 1 1 1 1 1 0 1 Q. Mr. Kaz, I've handed you a document we've marked as Exhibit One, and ask you if you recognize that document. A. That is the April 1th memorandum that was submitted under cover by Rick Allen on April 1st. Q. And it's that document that you've been using as an outline for your testimony today to recall what happened in your investigation and for other purposes? A. That's correct. ATTORNEY COVERT: Mr. Chairman, this memorandum, of course, is part of the record, and I would like it attached to the transcript. We'll have it marked as PSC Exhibit Number One. () -0

BY ATTORNEY COVERT: Q. Now, Mr. Kaz, among other things, did you get 1 1 1 1 1 0 1 involved in any other issues such as written --- did you get involved in ---? Hold on just a second. This is PSC Exhibit Number One. (PSC Exhibit One marked for identification.) BY ATTORNEY COVERT: Q. Such as the presence of a written contract between Doug's and their customers? A. We did ask that any contracts that were in hand, whatever you would say, be submitted with this, and with that, we've received a ---. Q. Wait just a minute. I'm handing you a document marked as Public Service Commission Exhibit Number Two. Do you recognize that document? A. Yes. Q. What is that document? A. It's an explanation of the services provided by Doug's, by the City of Morgantown Parking Authority, as well as a contract from, well ---. Q. Looks like McCoy Six Properties. A. Yes. McCoy Six Properties. I was looking () -0

somewhere else. Q. Sunnyside Properties being the third? A. Yes. Q. Morgan Pointe being the fourth. A. There are only --- yes. That's correct. Two pages. 0 1 1 1 1 1 0 1 Q. Did you receive those documents, not necessarily as an exclusive copy of all the contracts, but an example of the contracts they had with their customers? A. Yes. I believe they've also submitted --- they also might have submitted contracts or additional contracts in seeking to resolve some of the complaint cases that were filed against them. ATTORNEY COVERT: Mr. Chairman, I ask that our Exhibit Number Two be received, made part of the transcript and accepted into evidence in this matter. It will be marked and received in evidence as PSC Number Two, as well as Exhibit Number One. (PSC Exhibit Two marked for identification.) BY ATTORNEY COVERT: Q. Now, Mr. Kaz, these documents aren't normally () -0

filed with the Public Service Commission; is that correct? A. That's correct. Q. It's my understanding that when you get a complaint, using detailed information that should be on the face on the invoice and documents such as this, a non-consent tow situation, you use in an effort to 1 1 1 1 1 1 0 1 resolve the complaint before it proceeds to a more formal hearing; is that correct? A. We really don't have an informal complaint resolution process in place for wrecker companies. Normally the only way --- once in a while someone will call and we'll try to advise them as best we can based on the information that they provide over the telephone, but normally the only way that we become aware of a complaint between a towing company and an individual is with the filing of a formal complaint. Q. As you --- have all this proper information, even though it's a formal complaint, oftentimes they can be resolved? A. That's correct. Q. And if a tow company such as Doug's or other tow companies comply with the rule, it allows information that's on the face of the invoice to become an invaluable tool in resolving those complaints without excessive --- () -0