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Auctioneer Lee Ann Vande Kamp took bids last month from some of the people attending an auction at the Minneapolis impound lot.

Glen Stubbe, Star Tribune

Potential buyers checked out a decked-out 1972 Oldsmobile and a 2002 Cadillac Escalade.

Glen Stubbe, Star Tribune

Lee Ann Vande Kamp auctioned off unclaimed vehicles at the city impound lot. If proceeds from a sale top the city’s costs, state law says the previous owner can claim the surplus.

Glen Stubbe, Star Tribune

City keeps cash from owners of auctioned cars

  • Article by: MATT McKINNEY
  • Star Tribune
  • November 4, 2011 - 1:59 PM

Two weeks after his 1972 Oldsmobile Cutlass had been towed off a Minneapolis street, Garr White went to the city impound lot to get it back. He was a few hours too late.

Earlier that October day, the city auctioned the classic Olds for $3,650. Under state law, White was entitled to most of the proceeds. He got nothing.

It turns out that's business as usual in Minneapolis, where some 2,250 privately owned vehicles have been auctioned at the city's impound lot so far this year, according to a city official. Those sales generated an estimated $149,400 that could have been claimed by vehicle owners but instead was kept by the city. Yet so far this year just one person has taken home auction proceeds, a Minneapolis woman who got $960. That's still more than St. Paul, where city officials said this week that they haven't returned any money from impound lot auctions to private individuals this year.

Asked about the money, Jon Wertjes, a city official who oversees the Minneapolis impound lot, said Wednesday that efforts to notify vehicle owners of their rights to the money were sufficient, despite the fact that it's not mentioned in the letters the city sends before auctioning vehicles.

On Thursday morning, Wertjes said officials had changed their minds and would review the policy.

"We're going to see if there's a better way to handle it," said Wertjes, the city's director of traffic and parking services.

State law

Every month, the city of Minneapolis auctions unclaimed vehicles in the municipal impound lot at 51 Colfax Av. N., an industrial area just to the northwest of downtown.

The outdoor auctions typically draw dozens of bidders vying for 100 or more vehicles, many of them rusted, dented or sitting on flat tires.

State law allows the city to use the proceeds to pay itself back for towing, preservation and storage and some administrative costs. The city calculated that a vehicle, on average, must sell for $688 to cover those costs.

Most of the abandoned, unwanted and unclaimed vehicles auctioned so far this year went for less than that, but 428 vehicles sold for more, according to city estimates. The city's auction process usually happens within weeks. Unlike private impound lots, which must wait 45 days before auctioning off unclaimed vehicles, government lots are allowed to auction a vehicle within 15 days. The day a vehicle arrives at the impound lot, or very soon after, city staffers mail a certified letter to the vehicle's registered owner that makes a reference to state statute 168B. The notice says the owner will lose all "rights, title and interest" in the vehicle after 15 days, language that comes directly from the law. The letter also says any unpaid towing and storage fees will be assigned to a collection agency.

City spokesman Matt Laible said the city suspended the collections process last spring because it didn't pay for itself.

The letter doesn't mention another provision in the law: If the city comes out ahead after the auction, any surplus funds from the sale of the vehicle must be held for 90 days. If the owner doesn't claim the money, it goes to the city's parking fund, which covers the operation and maintenance of parking ramps, lots, on-street parking and the impound lot.

A businessman said he talked to city officials about the law several years ago when he was proposing to privatize a portion of the city's car auctions. Gary Stephanson said he was aware that vehicle owners rarely if ever got their share of the auction proceeds.

"I was told, 'It just doesn't work that way here,'" said Stephanson, the owner of Total Auto Solutions, a Little Canada-based business that sells cars for impound lots, charities and police departments in the Twin Cities. Stephanson said he was trying to hammer out a deal where he would market the city's cars through the website Carsoup.com, which is run by a friend of his, and keep a portion of the profits from the sale of each vehicle. The deal fell apart due to union concerns, he said.

Still waiting

White, the Minneapolis man who lost his Cutlass to the auction, said his nephew had been driving the two-door sedan and didn't have enough money to pay the towing and storage charges. The nephew called the impound lot before the auction, telling them he planned to claim the vehicle.

"They said they weren't going to auction it off, but when we got there it was gone," White said.

A city employee there never told them that they were entitled to a share of the proceeds, he said.

State law says that the only way to delay the 15-day holding period is to send written notice to the impound lot of the vehicle owner's intent to reclaim the vehicle. The government impound lot must then wait an additional 45 days before auction.

Contacted Thursday, White said he had talked to friends of his about the auction after being notified by the Star Tribune that he was owed money by City Hall.

"Nobody knew about that," he said. "Nobody's ever heard of anyone getting money back."

On Thursday afternoon, he planned to call the city to ask about his refund.

Matt McKinney • 612-217-1747

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