Are tow companies allowed to accept cash on the spot instead of towing your car?

Hello there. My car was parked on an unmarked street today, and as I walked away from my car, a tow truck comes up behind it and puts the lift under the tires. I hurry back to my car, and ask what the heck is going on. Apparently, the place where I was parked was a tow zone. The truck operator said that instead of towing it, he could accept $90 cash on the spot. He gave me a receipt for the transaction, but it all felt very shady.. Is this even legal? Who decides how much it is to stop from being towed? I would appreciate any comments from people who have had similar resolved experiences, or have some sort of legal knowledge. Thanks in advance for any light that you can shed.