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Memo- Amendments to the Massage OrdinanceDepartment of Administration Memorandum To: City Council From: Jim Genellie Date: October 7, 2011 Subiect: Amendments to the Massaqe Ordinance. Due to the problems that recently arose with several individuals who have massage licenses, we are considering some amendments to our current ordinance. In Hopkins we license the practitioner of massage. We do not license the business. This has allowed the business where the masseuses were arrested, located at 1209 Mainstreet, to quickly reopen with new licensed practitioners. Other cities, such as St. Anthony and St. Louis Park, license the business as well as the practitioner. St. Anthony includes a process for certain kinds of businesses to exempt themselves from having to get a license. (See SA 111.341 (C)). St. Louis Park simply requires all establishments conducting massage to get a license. State law exempts massage therapists who are working for or an employee of a medical professional licensed under Minnesota chapter 147 or 148, so any business such as this would not be licensed. Requiring other businesses in Hopkins, which have a massage practitioner, to get a license will mean a new cost for existing businesses. Assuming that we worked out the issues with licensing businesses as well as practitioners, could we prevent a business from quickly reopening as did 1209 Mainstreet? St. Anthony allows for licenses to be suspended without a hearing. (See SA 111.350). The City Attorney is not comfortable with this option and recommends that the Council hold a hearing to suspend a license. This is in keeping with the language in regard to other business licenses in the City of Hopkins. (See Attorney Memorandum - Massage memo 111004) One additional benefit of licensing the business as well as the practitioner is that the City could deny a future massage business license to individuals or entities that violated the law or failed to prevent a violation in the past. \Worksession Memo - Massage.doc Department of Administration Another issue seems to be with the paperwork accepted as proof that a practitioner has had the requisite hours of training. We are receiving some information that certain schools in California may not be legitimate and that there are people who are willing to provide documentation to a potential licensee for a price. This issue will have to be resolved with additional investigation of documents. The current fee structure may have to be revised. The investigation fee could be raised but the renewal license fee could be lowered. Attached is a draft of a revised massage ordinance that would require all businesses to get a license and would establish mechanisms for suspending, revoking, or denying massage licenses. Attachments: • SA 111.341 (C) • SA 111.350 • Massage memo 111004 (City Attorney's Opinion) • Draft Massage Ordinance \Worksession Memo - Massage.doc St. Anthony Massage Ordinance, Section 111.341 (C) (C) Certain businesses exempt. (1) The preceding provisions of this subchapter notwithstanding, no business license shall be required for a business establishment which offers massage as an accessory use if it meets all of the following criteria as evidenced by affidavits and other documents submitted to and in form and substance reasonably acceptable to the City Manager. (a) The principal activity of the business shall not be performing massage for a fee or other consideration. (b) The annual gross revenue of the business from performing massage is less than 25% of the total annual gross revenue of the business as shown by financial statements or an affidavit signed by the authorized officer of the business. In lieu of delivery of the aforementioned affidavit, at the direction of the city, the business shall be required to deliver, a certification from a certified public accountant, acceptable to the Manager, that the annual gross revenue from massage services, for the preceding 12 months, is less than 25% of its total annual gross revenue for the period of time. (c) The room or rooms where massage is performed shall not have an exclusive entrance from or exit to the exterior of the building in which the principal business is located or to a public concourse or public lobby. Notwithstanding the foregoing, massage may be performed by an individual at the residence of the person receiving the massage. (d) All fees or other consideration derived from performing massage shall be received by and accounted for by the proprietor of the principal business. (e) All individuals performing massage in connection with the business shall be employees of the principal business or shall be independent contractors or agents who perform massage pursuant to a written agreement with the owner of the principal business and each individual performing massage in connection with the business shall meet the educational requirements of § 111.352(E). (2) Any business that requests an exemption from the business license requirement shall submit the required affidavits and documents on an annual basis. The exemption request shall be due on or before the fifteenth day of March of each year. St. Anthony Massage Ordinance, Section 111.350 SUSPENSION OR REVOCATION OF LICENSE. The City Council may suspend for any period not exceeding 60 days, or revoke, any license issued pursuant to this subchapter upon finding a violation of any provision of this subchapter or upon violation of any other provision of this code or state law or regulation affecting the activities covered by this subchapter. Any conviction for prostitution or any other crime or violation involving moral turpitude shall result in the revocation of any license issued under this subchapter. Except in the case of a suspension pending a hearing on revocation, revocation or suspension by the City Council shall be preceded by written notice to the licensee of a hearing. The notice may be served upon the licensee personally or by mailing it to the business or residence address set forth in the application or on file with the City Manager. The notice shall give at least 10 -days notice of the time and place of the hearing and shall state the nature of the charges against the licensee. The City Council may, without notice, suspend any license pending a hearing on revocation for a period not exceeding 30 days. STEINER & CURTISS, P.A. ATTORNEYS AT LAW 400 WELLS FARGO BANK BUILDING 1011 FIRST STREET SOUTH HOPKINS, MN 55343 JEREMY S. STEINER* WYNN CURTISS JASON T. HUTCHISON *Real Property Law Specialist, certified by the Minnesota State Bar Association MEMORANDUM Date: 4 October 2011 To: Jim Genellie Assistant City Manager From: Jason T. Hutchison Assistant City Attorney Re: Massage licensing issues Office: (952) 938-7635 Fax: (952)938-7670 Direct: (952) 253-0070 jhutchison@steinercurtiss.com Facts A massage therapist licensed by the City of Hopkins has been arrested and charged with prostitution following an undercover police investigation of a massage parlor on Mainstreet. These events occurred on or about August 24, 2011. These events have caused certain members of City Staff and the Police Department to review the massage licensing ordinance, Section 1185, and consider what changes could be made to address perceived deficiencies in the current ordinance, which does not appear to have been updated since 1999. At present, Hopkins only licenses individual massage therapists: not the business establishments at which they practice. Issues You have asked me to address the following: 1) May the City may require massage parlors to apply for licenses, in addition to requiring individual massage practitioners to apply for licenses. 2) Can the City prevent a business where one of the practitioners is arrested for prostitution (or similar crime related to the licensed activity) from reopening as quickly as 1206 Mainstreet reopened? 3) May the City may use the fact that someone conducted prostitution at a particular location to deny any future license to that location either permanently or for a period of time? 4) How may the City address concerns that certain out-of-state schools provide licensing or diploma credentials "for a price," without actually requiring the individual to attend classes or otherwise meet the licensing criteria? I. Licensing the Establishment — not only the Massage Therapist Your first question is answered in the affirmative: The City may require massage parlors to obtain licenses in addition to requiring individual massage therapists to obtain licenses. The City, pursuant to Section 1.02 of its /Hopkins.civil/Massage Genellie.Massage.memo.doc Charter, has "all powers which shall be necessary to preserve, promote, advance and protect the health, safety and general welfare of persons." Licensing of business activities is permissible so long as it is reasonable, not unconstitutional, and not prohibited or preempted by state statute. Massage falls under a "catch-all" category of complimentary alternative medicine and practices falling under Chapter 147A of the Minnesota Statutes. The only real statutory limitation on the City's power to license massage is contained in Minnesota Statute 471.709, which states that "[A] municipality shall not require a massage therapist to obtain a license or permit when the therapist is working for or an employee of a medical professional licensed under chapter 147 [Medical Doctors] or 148 [Chiropractors]. Because there are no statutes prohibiting the City from imposing a license requirement for the massage parlor in addition to the practitioner and it falls under the authority granted by the Charter, the City may permissibly require licenses for massage therapy establishments. One caveat: I would recommend that the Council make some findings setting forth its reasons for the changes (and probably citing the current situation, too) when it adopts any new licensing requirements. II. Closing the business quickly — and keeping it closed. Your second question is more complicated. There are several possible ways a City may "shut down" this sort of establishment, but the real question is how a City may do it quickly and, preferably, before a hearing. There are several ways this can be done without having a hearing related to the license: (1) The police may seize the business equipment as evidence and get a warrant locking down the business as "crime scene" for further, more detailed investigation. This would keep the business closed for a few days. (2) The City could petition for a Temporary Restraining Order utilizing nuisance abatement remedies contained in its ordinances (although I would recommend a small change to the definition of Nuisance in Ordinance 615.02 to include a "public nuisances" for prostitution related activities). (3) The City could obtain an injunction under Minnesota Statute 617.81 for permitting a public nuisance (depending on the strength or weakness of the police reports). However, your question seems to be directed at a more immediate way to shut down the business, namely immediate suspension of the license by the City manager without hearing by the Council. Any time a city suspends a business license, it opens itself up to a potential "takings" claim. General due -process requirements apply to the taking of a license (or other property right). The conservative approach (and the approach endorsed by the League of Minnesota Cities and Minnesota case law on the subject) is that suspension or revocation of a license should only occur after notice of the violation and opportunity to be heard. Some cities, such as St. Anthony, take a more aggressive approach. Their ordinance provides, "The City Council may, without notice, suspend any license pending a hearing on revocation for a period not exceeding 30 days." I have not found any appellate case law indicating that this provision has been tested by a Minnesota appellate court, but it is a deviation from the traditional approach. If the City wants to be aggressive in this matter, our office can certainly re -draft the existing ordinance to provide for suspension of the business' license pending a hearing at a future date. However, the Council will need to acknowledge that there is some ambiguity under current law whether immediate suspension or revocation of a license may be occur without a hearing, and that anyone who wants to fight the issue will raise a due -process challenge to the ordinance. Also, I believe that the case for an immediate license suspension is better for the massage therapist who has been arrested than for the business. However, the situation could probably be addressed in a sufficiently timely fashion by simply moving forward with the hearing more quickly: the recent incident in occurred on August 24, 2011. If the City had the ability to suspend an establishment's license, a hearing could have been held in a matter of days and the license could have /Hopkins.civiWassage Genellie.Massage.memo.doc been suspended two or three weeks ago. Is a more rapid response than this necessary or desirable? III. Denial of a license due to previous illicit activity at that location. The City probably cannot deny a new license solely because a different individual committed a previous offense at that location. It would be like denying new bar (like Wild Boar, for instance) a license to open in a location solely because the previous owner had violated a liquor law: you can't punish someone who otherwise qualifies for a license solely because an unrelated individual broke a law. However, you probably can deny the license if the ownership of the new establishment is controlled by some of the same individuals or entities that violated the law or failed to prevent a violation in the past. IV. Suspected "sham" massage schools and licenses. Finally, as to out-of-state massage schools and bogus class certifications: What is the City currently doing to verify that a massage school diploma is legitimate and meets the criteria currently set forth in our ordinance? The current ordinance is quite specific on the educational requirements. I could (and would recommend) modifying the ordinance to make it clear that the license can be denied if the City Clerk thinks the diploma (or the school that issued it) is bogus. I think a realistic response should take into account how people will verify these diplomas: are they taken at face value, or are they meaningfully investigated? This concern should be addressed by starting with an in-house review of current licensing investigations. V. Proposed revisions to ordinances. I have drafted some proposed changes to our current ordinance, which hasn't been updated since 1999. Please consider these "draft" proposals; they are not yet ready for submission to the Council without some in-house discussions between City Staff, the Police Department, and our office. First, I recommend creating an additional "Massage Therapy Establishment" license — in addition to the existing Massage Therapist license. Second, the ordinances should add a requirement that the holder of the Massage Therapy Establishment license is responsible for providing proper "supervision of employees or independent contractors to deter prostitution related activities or other license violations by massage therapists." Third, the ordinances should and provide for license suspension or revocation for the establishment's failure to properly supervise. This establishes a "duty to manage or supervise" the establishment by ordinance and will make the suspension or revocation of a license easier for the City. In the present case, the establishment was staffed solely by two massage therapists acting as "independent contractors" on the day of offense; there was no manager or owner present at the time of the alleged prostitution. If the proposed revisions were in effect the Council could, quite easily, find that the holder of the establishment license hadn't done enough (anything) to properly supervise or deter prostitution related activities and use this finding as grounds to revoke or suspend the establishment's license — which would solve the current problem and similar situations in the future. Conclusion Please review the proposed revisions and provide me your comments. Please note that I have included authority for the City Manager to temporarily suspend a license, even though I believe that this is stretching the City's authority. Please don't hesitate to contact me with additional questions or concerns on this matter. JTH Encl. /Hopkins.civil/Massage Genellie.Massage.memo.doc Hopkins City Code (Rev 2006) 1185.01 Section 1185 — Regulation of Massage 1185.01. Subdivision 1. Definitions. For purposes of this section, the terms defined in this section have the meanings given them. Subd. 2. Massage Therapy or Therapeutic Massage. A scientific health care or health maintenance technique or procedure carried out by a massage therapist involving the massaging, kneading, rubbing, pressing, stroking, tapping, pounding, vibrating, or stimulating the human skin, muscles and tissues for no other purpose than physical fitness, health-care referral, healing, relaxation, or beautification. Subd. 3. Massage Therapist. A person, other than a person licensed as a medical doctor; chiropractor; osteopath; podiatrist; licensed nurse; physical therapist; athletic director or trainer; or beautician or barber who confine his/her treatment to the scalp, face and neck; who for compensation practices and provides therapeutic massage; who has a certificate of completion with a minimum of 500 hours of class credits from a recognized massage therapy school. Subd 4 Massage 'Therapy Establishment An establishment providing massage therapy or therapeutic massage to the public other than a hospital sanatorium rest home nursing home. boarding home medical doctor's office chiropractor's office or other institution licensed under the provisions of Minnesota Statutes Sections 144.50--144.69. Subd. 54. Patron. Any person who receives a massage under such circumstances that is reasonably expected that he or she will pay money or give any consideration therefore. Subd. 64. Recosnized School. Any school or institution of learning which: a) has for its purpose the teaching of the theory, method, profession or work of massage therapists, which school requires a resident course of study of not less than 500 hours before the student shall be furnished a diploma or certificate of graduation from such school following successful completion of such course of study or learning. b) that is operating legally within the locality or province in which they are located. c) Schools offering a correspondence course not requiring actual attendance of class shall not be deemed a recognized school. 1185.05 License Required. Subdivision 1. It shall be unlawful for any person to practice as a massage therapist or operate a massage therapy establishment in the City of Hopkins without first obtaining a license to do so. However, no license is required for any massage therapist working for or as an employee of.a medical professional licensed under Minnesota Statutes Chapters 147 or 148. Subd. 2. The license will be effective for one year and run from July 1 through June 30 of the license year. (Amended Ord. 2003-899) Subd. 3. Exclusion. Any person who is licensed by the Minnesota Board of Medical Practices shall not be required to obtain a massage license from the City of Hopkins when said person provides proof of licensure to the City Clerk. 1185.07. License Application. Subdivision 1. Massa re€ Therapist License. Application for a Massage Therapist license will—shall be made on forms provided by the City Clerk. The applicant wall—shall provide the following information as well as any other information deemed reasonably necessary by the City Clerk: Section 1185 1 a) Applicant's full name (first, middle, and last) b) Any other name(s) the applicant has been known by c) Applicant's home address and telephone number d) Applicant's driver's license or state ID number c) Applicant's date of birth d) Applicant's address(es) for the past five years e) Diploma or Certificate of completion of 500 or more hours from a recognized school of Message Therapy f) Proof of course work as set out in 1185.07, Subdivision 2 g) A description of any crime or other offense, including the time, place, date and disposition, for which the applicant has been arrested. Subd. 2. Proof of Course Work. Each applicant for a Massage Therapist license shall also provide proof of minimum hours of course work in the following areas: a. 150 hours in the theory and practice of massage, including but not limited to Swedish, Esalen, Shiatsu, and/or foot reflexology techniques; and b. 100 hours of anatomy and physiology, including but not limited to skeletal and muscular structure and knesiology; and c. 8 hours of hygiene and sanitation; and d. 30 hours of business practices and ethics. Subd 3 Massage Therapy Establishment license Application for a Massage 'therapy establishment license shall be made on forms provided by the City Clerk The applicant shall provide the following_ information as well as any other information deemed reasonably necessary by the City..Clerk: a) Applicant's full name ( first, middle. and last) _ b) Any other name(s) the applicant has been known by c) Applicant's home address and telephone number d) Applicant's driver's license or state ID number c) Applicant's date of birth. d) Applicant's address(es) for the past five years e) A description of any crime or other offense including the time place date and disposition for which the applicant has been arrested. f) If Applicant is a corporation limited liability company partnership or other entity, then the Applicant shall provide the information requested in subsections (a) --- (e), above for each officer, director, or partner of the entity. 1185.09 Exclusions. Subdivision 1. An applicant is eligible for a mas: 1185.11Fees. Subdivision 1. The fees for a tlief pay fnaisg ssage Therapy licenses and Massae Therapy Establishment licenses will be set by resolution from time to time. Each license shall be issued for a period of one year, except that if the application is made during the license year, then the license fee shall be one-fourth of the fee for each three months or part thereof for the remainder of the license year. License and investigation fees must be submitted at the time of application. (Amended Ord. 2006-963) Subd.2. Additional Fee. The initial application shall also include a non-refundable investigation fee to be set by resolution from time to time. 1185.13Renewal. Applications for renewal shall be submitted at least 60 days prior to the end of the license year on forms provided by the City Clerk. 1185.15 License granted. Upon receipt of anthe-_application, the City Clerk shall forward the application to the Hopkins Police Department. The Hopkins Police Department shall report, in writing, to the City Clerk, as to any police record of the applicant (or any of-applicant's officers directors, or partacrs), which may reflect upon public health, safety or moral character. When all of the conditions of this ordinance have met, the City Clerk vA44-shall issue the license. if anv of the conditions have not been met to the satisfaction of the City Clerk the license shall not issue. 1085.17 Denial. No license shall be issued to an applicant who is a natural person, or to an applicant who is a corporation limited liability company, or other business entity where anv partner, officer, or directorwho: a. is under 18 years of age; b. has been convicted of any crime directly related to the occupation and has not shown competent evidence of sufficient rehabilitation and present fitness to perform the duties and responsibilities of a licensee as prescribed by Minnesota Statute Section 364.03, Subd. 3; c. is not of good moral character or repute; Section 1185 d. owes taxes, assessments, or other financial claims to any governmental agency that are due and delinquent. 1185.19_ Revoking, Suspending Denying or Not Renewing a License. Subd 1 The City Council may revoke suspend deny or decline to renew any Massage Therapist license or Massa47e Therapy Establishment license issued under this Section. The basis for such revocation suspension denial or non -renewal includes but is not limited to, any of the following circumstances: a) The license was procured by misrepresentation of material facts-. b) The applicant or one acting in his/her behalf made oral or written misstatements accompanying the application. c) The applicant has failed to comply with an_y condition set forth in any other permits granted by the City of Hopkins. d) The activities of the applicant or any owner/agent create or have created a danger to the public health, safety or welfare. e) Failure to pay any application penalty or reinstatement fee required by this Section and City Council resolution. f? Violation of any regulation or provision of the code reasonably related to the licensed activity for which the license has been granted or any other state or federal regulation or law so related. g) Failure of a holder of a Massage Therapy Establishment license to properly supervise an employee or independent contractor who has violated any ordinance or state or federal statute reasonably related to the licensed activity. 1h) Failure of a holder of a Massage TherMpy Establishment license to properly supervise its Massage Therapists employees or independent contractors so as to prevent prostitution or prostitution -related activities as defined in Minnesota Statutes Section 617.80. g, Any violation of this Section 1.185. Subd 2 Notification. The City Manager shall notify the applicant or holder of the license in writing of the basis for the revocation suspension denial or non -renewal and the date upon which the City Council shall review the request to revoke suspend deny, or not renew the license. The notice required by this section shall be served upon the owner or the owner's agent at least fourteen (14) days before the City Council hearing Service shall be deemed sufficient if the notice is sent to the owner or the owner's agent b first mail at the address provided in the license application; service of the notice shall be deemed effective as of the date of mailing. Subd 3 Hearing The applicant or holder of the license (or their agent) and the City Manager or desiQuee shall be given an opportunity to be heard and may be represented by counsel. Both sides may be permitted to examine the other side's witness(es). The Council shall hear all relevant evidence and arguments and shall review all testimony, documents, and other evidence submitted. The Council shall record the hearing and keep a record of documentary evidence submitted. Subd 4 Decision The City Council shall make findings based on the evidence and shall make a decision on the recommendation to revoke suspend deny, or non -renew a license based. on the findings. The City Council shall issue a written decision within 30 days following the date of the hearing by first class mail The decision shall specify the license to which it applies (whether Massage Therapist licenses Massagepy Establishment license or both), the duration of the revocation, suspension, denial or non -renewal (whether permanent or temporary), and the conditions that must be met before the license may be reissued or reinstated (if any). Thereafter, and until a license is reissued or reinstated, no Section 1185 4 Massage Therapist that has had his or her license revoked suspended, denied or non -renewed may perform therapeutic massage in the City of 1-Iopkins; and no Massage Therapy Establishment that has had its license revoked, suspended, denied, or non -renewed may offer therapeutic massage tn��-in the City of Hopkins, or allow another to do so at its btisiness4eeatiea. Subd. 5. License Process after Revocation, Suspension Denial or Renewal Declination. After the City Council revokes, suspends, denies or declines to renew a license, no license shall be issued until the City Manager determines that the applicant/licensee has remedied the conditions identified by the City Council as the basis for its action. The re -issuance of a. license after suspension, revocation, denial or non-retiewal is discretionary. Any application to obtain a Massage Therapist license or Massage Therapy Establishment license after the City Council has revoked, suspended denied or declined to renew a license must be accompanied by all fees required by this section. Subd 6 Temporary suspension 'I'lle City Manageray_ temporarily suspend a Massar?e Therapist license or a. ]Massage Therapy Establishment license for not more than 21 days pending a hearing before the City Council for any conduct reasonably believed to violate the provisions of this Section 1185. 1185.20. Effect of Revocation. Suspension. Denial or Non -Renewal. If a license is revoked suspended denied or not renewed by the City Council, it shall be unlawful for a Massage Therapist or a Massage Therapy Establishment to offer therapeutic massage until such time as a valid license has been issued. stat-4tLttt+te-r�aa-;�etiyit;,l: 1185.21 License Posted. Tl-te-A Massage Therapist license and a Massage Therapy Establishment license must be posted in a conspicuous place where all patrons may see it. 1185.23 Hours of Operation. A massage therapist may not give to any patron any massage treatment between the hours of 10:00 p.m. and 8:00 a.m. Any treatment in process at 10:00 p.m. must end at 10:00 p.m. 1185.25 Home Occupation. Whenever massage therapy is conducted in a residential area as a home occupation, the person(s) conducting the business will adhere to all aspects of the Zoning Ordinance in relation to home occupations. In addition, massage therapy in home occupations will be limited to one area and one table in operation at any given time. 1185.27 Inspection by City Officials. Subdivision 1. During any hours in which a licensee is performing massage therapy treatments, the area where the service is being performed shall be open to inspection by City inspectors and police officers. Subd. 2. Each licensed therapi7t—Massage'Therapist shall be responsible for adhering to the following minimum requirements for the health and safety of all patrons: a. The massage table shall have a washable surface b. The massage table shall be covered with a disposable paper cover or with a sheet that is washable. C. A clean paper cover or washable sheet must be used for each patron and the massage therapist must have enough clean covers on hand to accommodate the number of patrons scheduled on one day. d. Used washable covers shall be placed in covered containers until they are washed. e. Used paper covers shall be placed in covered waste containers. f. Lotions used in the treatment shall be stored in covered containers. Section 1185 g. The massage therapist shall wash his/her hands with soap and warm water immediately before beginning a treatment on each patron and use paper towels for hand wiping. Paper towels must be stored in a covered container. h. Bathroom facilities shall be made available to patrons. Paper towels, which shall be stored in covered containers, shall be provided for hand drying. i. Bathrooms shall be kept in clean repair. j. The floor shall be kept free of dust and debris. k. No food or drink shall be allowed in the treatment area. 1. Implements used directly on the skin shall be cleaned and sanitized after use on each patron. Such implements shall be stored in closed containers with a dry sanitizer. Subdivision 2. Massage Therapists that are licensed by the City of Hopkins shall follow and adhere to the Code of Ethics for Massage Therapists as published by the National Certification Board for Therapeutic Massage and Bodywork. This shall in no way require membership with American Massage Therapy Association. Subdivision 3. The holder of a Massage Therapy Establishment license is responsible for supervising the conduct of all Massage Therapists providing therapeutic massage at that establishment and ensuring, they conform to the requirements of this Section. 1 185.29. Penalties. A person who violates any of the provisions of Section 1185 may be charged with a misdemeanor or be subiect to the issuance of an administrative citation as provided in Section 355 or both. Each day that a violation continues shall be deemed a separate offense. The City Manager or designee may post notice at the business location notifying the public of the license suspension. revocation, or non -renewal of a Massage Therapist license or Massage Therapy Establishment license. This section was added by Ordinance 99-931 Section 1185