CR 91-203 Pawnshop Ordinanceri
September 9, 1991
Proposed Action
Y O
V '
Ay 5
PAWNSHOP ORDINANCE
Council, Rpt 91 -203
Staff recommends that the Council approve the following motion: Move
that the Hopkins City Council approve Ordinance #91 -689 for second
reading and order published and adopt Resolution #91 -115 establishing
fees.
This action will establish Section 1180 in the Hopkins City Code which
will license and regulate pawnshops. It will also set the amount of
the investigative and annual fees.
overview
Council approved Ordinance #91 -689 for first reading at the July 2,
1991.Council meeting. At that time staff was instructed to,meet with
the owners of the pawnshops located in Hopkins to discuss the size of
the annual fee and any other provisions of the ordinance.
Staff met with representatives from the two pawnshops in July. There
was considerable discussion concerning the annual fee. There was.also
discussion concerning some of the proposed provisions of the ordinance
itself.
The police department recently conducted a study of the amount of time
necessary to review the lists of pawned items which could be received
daily from each pawnshop. The department also has had several months
to review the operations of the current pawnshops.
Based upon these discussions and further review by the Police
department, staff is recommending approval of Ord. #91 -689 as revised.
Staff is recommending an annual fee of $3,500 and an investigation fee
of $500.00.
Primary Issues to Consider
o What has been the experience with the current pawnshops.?
o What changes were made to the ordinance since first reading?
o What fees should be charged for a pawnshop license?
o What fees are other cities charging?
o When would the ordinance become effective?
a � -
Council Report #91 -203
Page 2
Suvvortina Information
o Analysis of Issues
o Alternatives
o Ordinance #91 - 689
o Resolution #91 -115
me A. Genell
Cites Clerk
Council Report #91 -203
Page 3
Analysis of Issues:
o What has been the experience with the current pawnshops?
The following actions have already occurred in connection with the
current pawnshops:
o A minor pawned items belonging to his parents.
o Two AM /FM casette stereos were recovered that were accepted by
a pawnshop even though they did not have any serial numbers on
them. This is a violation of state law.
o A stolen cellular phone was recovered from one of the
pawnshops.
o Information was passed to the St. Louis Park police department
concerning a stolen portable radio that was pawned.
o What changes were made to the ordinance since first reading?
The following provisions were discussed at the July meeting.
1) 1180.19, Subd. 5. The requirement to deliver the report to the
police department every day. The pawnshop owners questioned the
necessity and the logistics of complying with this provision.
The police department responded with the observation that in
order to have effective regulation it is necessary to have this
information daily. The reports can either be mailed, hand
delivered or faxed to the department.
2) 1180.19, Subd. 6. One Hundred and Twenty Day Redemption Period.
The owners objected that this was entirely too long to be forced
to keep an item. The police department agreed. This section was
revised to read as follows:
subd. 6. Thirty -Day Redemption Period Any person pledging, pawning or depositing
an article for security shall have a minimum of thirty (30) days from the date when
the loan or pledge becomes due and payable to redeem the article before the article
becomes forfeitable.
3) 1180.19, Subd. 7. Minimum Period Before Redemption of Sale. The
owners objected to the provision requiring a 72 hour period
before an item could be redeemed. They maintained that they have
customers who only require cash for one day. The police
department's position was that they must have time to review the
lists of items that they receive from the pawnshops. It will do
little good to discover a stolen item only to find that it has
already left the pawnshop. The department did agree to reducing
the time period. This section was revised to read as follows:
Council Report #91 -203
Page 4
Subd. 7. Minimum Period Before Redemption or Sale No personal property on
deposit with any licensee nor property purchased by or sold to, or in any other ways
coming into the possession and under the control of any licensee in the due course
of business, shall be permitted to be redeemed from the place of business of the
licensee for a period of forty -eight (48) hours, nor shall the property be sold
within ten (10) days after the copy and statement required to be delivered to the
Chief of Police has been delivered.
4) 1180.19, Subd. 8. Police Restrictions on Sale. The owners
objected to the provisions in this section which allowed the
Chief of Police to put a hold on any item preventing it from be
redeemed or sold for a period not to exceed 6 months. The police
department's position was that while this may occasionally be
necessary, because of extended investigations, it would happen
only rarely. Staff is not recommending any change in the
original - ordinance.
5) 1180.19, Subd. 9. Payment by Check The owners of the
pawnshops objected to this provision. They wanted to be able to
pay in cash. Staff's position is that this is absolutely
necessary in order to establish the necessary "paper trail" for
investigative purposes. Staff is not recommending any change in
the original ordinance.
o What fees should be charged for a pawnshop license?
The original proposed annual fee was $12,000. This was based upon the
fact the city of Minneapolis assigned a full time police officer to
regulate five pawnshops. The Hopkins Police Department undertook a
pilot study to determine how much time would actually be spent
reviewing the daily ,lists of pawned items. Based upon this study the
department is recommending an annual fee of $3,500.
This fee is based upon a public service officer working overtime to
review these lists. Currently the department does not have the
personnel to handle this task as part of their regular duties. Staff
feels that this is the minimum fee that can be recommended at this
time. Staff may seek to have this fee adjusted after the department
has had one year of experience with regulating pawnshops. The
investigation fee is still recommended to be $500.00. It should be
noted that the proposed annual fee will not cover any of the costs
associated with investigating any leads which are uncovered through
the regulation of the pawnshops.
Council Report #91 -203
Page 5
o What fees are other cities charging?
The following is a list of what other cities are charging for pawnshop
licenses:
CITY
ANNUAL FEE
INVESTIGATION FEE
Anoka
Apple Valley
Bloomington
Brooklyn Park
Champlin
Columbia Heights
Crystal
Eagan.
Fridley
Golden Valley
Little Canada
Minneapolis
Plymouth
Ramsey
St. Louis Park
St. Paul
West St. Paul
$ '100
6,500
1,500
1,000
12,000
350
700
8,000
8
12,000
1,500
370
12,000
1,500
100
1,066
100
$ 50
1,500
1,500
10,000
350
400
1,500
1,500
o When would the.ordinance become effective?
Staff is proposing the ordinance become effective on January 1, 1992.
This would give existing pawnshops time to decide whether they want to
remain in Hopkins under the new regulations.
Alternatives
1) Move that the'Hopkins City Council approve Ordinance #91 -689
for second reading and adopt Resolution #91 -115 establishing
fees.
This action will amend the City code to license and regulate
pawnshops.
2) Move that the Hopkins City Council approve Ordinance #91 -689
and amend Resolution #91 -115 to set' the annual fee at a
different amount than that recommended by staff.
This action will amend the City code to license and regulate
pawnshops and will establish the annual fee at a different
amount than that recommended by staff.
3 ) Move that the Hopkins City Council not approve Ordinance #91-
689
CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 91-115
WHEREAS, the Hopkins City Council has established an ordinance regulating
pawnshops within the City of Hopkins, and
WHEREAS, the ordinance allows the City Council to establish fees by resolution,
NOW THEREFORE BE IT RESOLVED, that the City Council of the City of
Hopkins hereby establishes the following fees for the issuance of a pawn
shop license:
Annual fee: $3,500.00
Investigation fee: $ 500.00
Adopted by the City Council of the City of Hopkins this 17th day of September,
1991.
B
Nelson W. Berg, Mayor
ATTEST:
James A. Genellie, City Clerk